A sinking feeling about insurance

The following article was posted to the NorthEscambia.com news website on September 11, 2011:

Florida Gov’t Weekly Roundup:  A Sinking Feeling about Insurance, Fair Districts Fair

A crack in the foundation of the insurance industry’s push for higher sinkhole premiums appeared this week: opposition to the proposed rate increases has gotten so loud that it can’t be ignored no matter how much the rate increases might make sense financially.

With some coastal residents facing sinkhole premium hikes of more than 2,000 percent, the state-backed insurer Citizens Property this week said, essentially, ‘Well, OK, maybe that’s a bit much – we’ll see what we can do.”

Meanwhile, a controversial state law requiring new financial assistance applicants to pass drug tests before receiving benefits moved to federal court this week following a challenge by the American Civil Liberties Union and a U.S. Navy veteran who contend applicants shouldn’t have to offer a specimen simply because they are in temporary financial straits.

Responding from another federal courtroom in Miami, a judge upheld the “Fair Districts” amendment governing the drawing of congressional districts. In a ruling issued Friday, Judge Ursula Ungaro rejected an effort by two members of Congress to have the requirement thrown out. The two had argued the new constitutional requirement will make it impossible to draw minority access districts.

A cloud was cast over the week’s activities by the deaths of a pair of political insiders. Republican Party of Florida Chairman Dave Bitner, 62, and Republican lawyer and environmental activist Thom Rumberger, 79, both died this week, both leaving behind a host of admirers.

CITIZENS SINKHOLE RATE PHASE -IN LIKELY

Responding to cries from policyholders who could see their rates shoot through the roof, Citizens’ new chairman, former state legislator Carlos Lacasa, called a special meeting of the insurer’s board of governors to discuss ways to temper the blow of proposed sinkhole premium increases to many of its 1.4 million policies.

Citizens officials said they will consider phasing in sinkhole premium hikes required by lawmakers earlier this year as they try to balance actuarial soundness and political realty in the face of objections from customers of the state’s largest property insurer.

The announcement came as the company readied for a public hearing Tuesday in Tampa, a location near the epicenter of sinkhole claims and activity. The board voted in July to approve the premium increases.

Citizens officials have said repeatedly that sinkhole claims are threatening the company, its policyholders, and maybe the state’s residents, who back the company and would bail it out in the event of failure. Last year, the company collected $32 million in sinkhole premium, but paid out nearly $250 million in claims.

“FAIR DISTRICTS” FAIR: FEDERAL JUDGE SAYS.

Turning aside a challenge from a bipartisan pair of members of Congress who had opposed the measure, U.S. District Judge Ursula Ungaro, said she heard nothing in oral arguments that swayed her that the Fair District Amendments weren’t fair – or at least legal.

The amendment, which is aimed at cutting back on politically gerrymandered districts, was overwhelmingly approved by voters in last year’s elections, as was another dealing with legislative districts.

Attorneys for U.S. Reps. Corrine Brown, a Democrat, and Republican Mario Diaz-Balart argued it was an unconstitutional infringement on the Legislature’s rights under the U.S. Constitution to draw the lines. Brown and Diaz-Balart, who also fear the standards could hurt minority representation, promised to appeal.

“It’s just step one, and we’re going on all the way to the Supreme Court, if necessary,” Brown said.

ACLU CHALLENGES DRUG TESTS

A new Florida law requiring applicants to pass drug tests before getting temporary cash assistance from the government amounts to unconstitutional suspicionless searches, the ACLU contended in a lawsuit filed this week in federal court to shut the program down.

As of July 1, new applicants for temporary government assistance through the program known as TANF, or Temporary Assistance to Needy Families, were required to pay for a drug test. If the test comes back negative, the fee is repaid by the state. A positive test bars the applicant from receiving benefits for a year.

“The new law assumes that everyone who needs a little help has a drug problem,” said Luis Lebron, a University of Central Florida accounting undergraduate and U.S. Navy vet who is the lead plaintiff in the class action lawsuit. “It’s wrong and unfair. It judges a whole group of people on their temporary economic situation.”

Backers of the measure, including Gov. Rick Scott, say private businesses have been requiring such tests for years and government should be no different. A survey released Wednesday by the Drug and Alcohol Testing Industry Association, a trade group for testing companies, found 57 percent of employers conduct drug tests on all job candidates.

Critics argue that recipients are being singled out based on a myth that poor people are more likely to use illegal drugs. They point out that other government programs such as student loans, food stamps and business grants do not require recipients to be screened for drug use.

NAN RICH LOOKS TOWARD 2012:

Senate Democratic Leader Nan Rich is considering a 2014 run for governor. Rich said this past week that Gov. Rick Scott’s priorities have been made clear by the state’s budget and she thinks most Floridians don’t share his priorities.

The longtime children’s advocate, who has been in the Legislature since 2000, said she’s talking to possible supporters to decide whether she should run. So far, no prominent Democrats have announced for the race.

“I think I would be a good governor,” Rich said

PSC OLD HAT TO WEAR NEW HAT

Looking for new blood to lead the Florida Public Service Commission, the commission this week turned to an old hand by choosing former Commissioner Braulio Baez to come back as the agency’s new executive director on a 3-2 vote.

Supporters pointed to his knowledge of the agency, while dissenters said he lacked management experience and raised a concern about a past ethics violation. Baez will replace Tim Devlin, who was forced out as executive director in May.

REPUBLICANS, FRIENDS SAY GOODBYE TO BITNER, RUMBERGER

Friends and colleagues bid farewell this week to Dave Bitner, Republican Party of Florida chairman, who died this week following a short battle with amyotrophic lateral sclerosis, or ALS. He was 62.

Just recently Bitner had announced he was stepping down as head of the party, saying the degenerative disease was making it impossible for him to carry on his duties.

He recommended that he be succeeded by his vice chairman, Lenny Curry of Jacksonville, and several top party activists have said now it’s even more likely that the party leaders will go along and make Curry the next chairman.

Bitner was widely seen as a steadying presence at a Republican organization rocked in recent years by scandal and political divisions.

Prominent Republican attorney and longtime environmental advocate, Thom Rumberger died Wednesday following complications from diabetes. He was 79.

Rumberger had a long career of public service and lawyering, and was also considered one of the pre-eminent advocates for Everglades protection and restoration.

Rumberger most recently was also among those who worked in favor of the “Fair Districts” amendments to the constitution that were in court on Friday – notable because he was one of the few Republicans in favor of the plan.

He was also a former judge and lost a 1970 bid for attorney general to Bob Shevin. Rumberger was one of the founders of the law firm Rumberger, Kirk and Caldwell.

SAY WHAT YOU MEAN, MEAN WHAT YOU SAY

A pair of political leaders this week found themselves in the middle of controversies after comments on separate issues left some room for debate as to just what they meant.

Depending on what you read, Gov. Scott either expressed cautious interest in drilling in the Everglades or said that in an abundance of caution, such a suggestion was for now off the table.

Ambiguous – some might say avoiding – comments made by Scott this week during an Economic Club of Florida speech led some media outlets to report Scott was on board with Everglades exploration, a stance held by U.S. presidential candidate Michele Bachmann, when given a couple chances to rule it out, he didn’t.

“With regard to the Everglades, I think we have to be very cautious if there’s going to be any more drilling,” Scott said in answer to a question from the audience. “It’s my understanding, we haven’t had any problems to date so my goal would be to be very cautious.”

Shortly after Scott’s appearance, spokeswoman Amy Graham said far more clearly what the administration now says the governor was trying to say: When it comes to drilling in the Everglades, “that discussion is not on the table.” Graham said.

Meanwhile, Jacksonville Mayor Alvin Brown’s position on a tolled outer beltway around the southwestern part of Jacksonville similarly was hard to read. Brown position on the beltway has gone from not supporting to supporting it to partly supporting it. Similarly, a Brown employee, former Sen. Tony Hill, had to clarify for the waffling mayor this week: cutting the baby in half. Brown supports the beltway, Hill said, but doesn’t support tolls.

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