TALLAHASSEE, Fla. (AP) - Florida loosened its rules on the sale of backup hurricane insurance by foreign companies Tuesday in hopes of eventually lowering premium rates for consumers, even though that's unlikely in the short term.

Gov. Charlie Crist and the state Cabinet approved the rules.

They implement a new law that lets Insurance Commissioner Kevin McCarty lift or modify collateral requirements on reinsurance - insurance for insurance companies.

Domestic sellers don't have to put up any collateral while foreign firms must post 100 percent collateral.

The rules will let McCarty reduce that requirement on a case-by-case basis for foreign reinsurers but only if they have a strong financial background and good track record of paying claims.

"Attracting this capital is an important step toward stabilizing our insurance market," McCarty said. "This rule sends a message of openness to the reinsurance market."

Foreign companies already provide 92 percent of Florida's reinsurance, but the collateral requirement has been cited as a barrier to even greater investment in the state's insurance market, McCarty said.

McCarty said reinsurers have told him they don't expect easing the collateral requirements will reduce rates, but he said that could happen in the future.

Reinsurance is one of several components to go into rates paid by homeowners. It covers catastrophic losses that exceed what an insurance company could pay out on its own.


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