Sunshine News
by Gary Rohrer
April 12, 2011
Private insurers began the 2011 legislative session with high hopes for a slate of bills to move through the lawmaking process, but while the Legislature has moved relatively quickly on the budget process and a merit pay bill for teachers, insurance reform measures have yet to see a floor vote.
Citizens Property Insurance, the state-run homeowners’ property insurer, is the source of most of the ire of the private insurers, who would like to see more actuarial-based pricing from a competitor they say has an unfair competitive advantage because it is not subject to the same standards for reserves as private companies.
“We’re looking at an insurance company that, if it were a private company, would have been shut down by the OIR (Office of Insurance Regulation). At the worst, the directors of that company and the board of that company would have been arrested for fraud and thrown in jail,” said Sen. Alan Hays, R-Umatilla.
Hays is sponsoring Senate Bill 1714, which limits the value of homes that can be insured under Citizens and bars applicants for Citizens from obtaining insurance from them if private insurers offer a policy within 25 percent of the cost of the state-run insurer.
The bill narrowly made it through its first committee stop in a 6-4 vote, and is scheduled for a second committee meeting this week.
Getting Citizens back on a level competitive playing field is seen as the key to attracting more private insurers into the Florida market, but Hays says there is also an incentive for taxpayers to get Citizens in check. A destructive hurricane could leave Florida with a hefty debt burden.
“If Citizens comes up with this one-in-100-year storm, it would mean $14 billion to the taxpayers of Florida,” Hays said.
A similar House bill has made it through two committees.
Further along in the legislative process is Senate Bill 408, a bill that eliminates the requirement for insurers to offer sinkhole coverage and reduces the surplus requirement for private insurance companies, which has made it through three committees and is ready for a vote on the Senate floor.
Sinkhole claims have been a thorn in the side of Florida insurers in recent years, with claims tripling in the past three years. Many of those claims often involve a simple crack in the pavement or driveway.
Sen. Garrett Richter, R-Naples, sponsor of SB 408, pushed a similar bill last year that made it through the Legislature only to be vetoed by then-Gov. Charlie Crist.
Even though the reforms pushed by the insurance industry haven’t moved as quickly as other large-scale reforms, like bills dealing with education and pension reform, there are still 25 days left in the legislative session.
“We remain hopeful that some of these bills will cross the finish line,” said Kyle Ulrich, senior vice president of the Florida Association of Insurance Agents.
