Bill Would Move Storm Modeling, Research From FIU to FSU Insurance Supercenter
Florida International University has long been known as a hurricane research center. Think: the famous Wall of Wind, the giant fan system that tests the effects of 157-mph winds on structures and materials. A much larger, stadium-sized testing facility for wind and waves may soon be on the way.
FIU, with its main campus in Miami, also has been recognized for its hurricane-loss modeling, often used by insurers and regulators to gauge the potential impact of storms that visit Florida annually. Under a bill approved by a Florida House of Representatives subcommittee last week, management of that modeling program and other functions would be transferred to Florida State University, part of a move to make FSU a powerhouse insurance research center.
“The bill transfers all of the duties, powers, functions, funds, existing contracts, and other issues associated with or related to the public hurricane loss production model from Florida International University to Florida State University,” reads a legislative staff analysis of House Bill 1097.
The changeover also would come with $5 million in recurring public funds and $1.5 million in non-recurring funding for the FSU’s Florida Catastrophic Storm Risk Management Center, which has been largely unfunded since 2019, and would change the name to the Florida Center for Excellence in Insurance and Risk Management.
“We want the center to go from excellent to preeminent,” said state Rep. Jennifer Canady, R-Lakeland, who is sponsoring the bill. She acknowledged at the House Insurance and Banking Subcommittee that she is an FSU graduate.
The center would work closely with the Florida Office of Insurance Regulation on research and data, including loss modeling, consumer protection, claims handling, reinsurance and Cat Fund cost factors, and more. The program should also assist lawmakers in developing “evidence-based policy options” and in identifying emerging insurance issues in the state, the bill prescribes.
“This would be good for independent research,” said Professor Charles Nyce, chair of FSU’s Department of Risk Management and Insurance. “OIR could ask for research; the Legislature could ask for research.”
The new center at FSU also would be required to publish a hurricane loss data summary each year, and would be tasked with developing a program to encourage more actuarial science students to work in the fields of risk management and insurance – in the public sector.
Canady and the subcommittee did not explain what prompted the bill. FIU administration officials and lobbyists did not speak at the hearing and did not return multiple phone calls and emails seeking information about the bill and the handoff to FSU if the bill passes.
Hugh Willoughby, a professor at FIU’s Department of Earth and Environment, told Insurance Journal that the switch would not affect the meteorologists in his department. He noted that much of the insurance and storm research already is done at FSU, “and handled very ably.”
Canady suggested that separating the insurance and loss research from the material and structural analysis could benefit both universities.
“If I were FIU, I might be relieved to let the number crunchers do their thing,” Canady said at the meeting.
The bill does not mention how the director of the center will be named, but it does make clear that FIU and other universities that have contributed to the hurricane models will remain part of the process.
“The bill mandates OIR to contract with the Center to manage the public hurricane loss model, and the Center to work with other entities and universities, including Florida International University (FIU), to develop the public model,” the bill analysis reads.
Hurricane loss models are considered vitally important to carriers and regulators in preparing for reinsurance, rate increases and potential storm losses. But the models, produced by a number of academic and private researcher programs around the country, can vary considerably. In 2000, the Florida Legislature authorized the founding of a public model, spearheaded by researchers at FIU.
The public model “is a complex collection of computer programs that simulate and predict how, where and when hurricanes form, their wind speeds, intensity and sizes, their tracks, how they are affected by the terrain after landfall, how the winds interact with different types of structures, how much damage they can cause to house roofs, windows, doors, and interiors, how much it will cost to rebuild the damaged parts, and how much of the loss will be paid by insurers,” FIU’s Hurricane Research Center explains on its website.
The Florida Commission on Hurricane Loss Projection Methodology has accepted the public model, along with models developed by six private firms, including Verisk and Karen Clark & Co.
The new center at FSU will aim to provide improved modeling information and other data.
“What we’re doing here is so that the Legislature can have good, independent information,” Canady said.
Having passed the insurance subcommittee with no opposition, HB 1097 is now in the House Budget Committee. The full text of the bill can be seen here. A similar bill, SB 114, is in the Senate.