Consumer Advocates Concerned About Pending Florida Insurance Legislation CS/SB 1770 and HB 909

 

A consortium of consumer advocate groups held a press conference at Florida’s Capitol today, April 15, 2013, to address their concerns with pending insurance legislation CS/SB 1770 and HB 909.

Representatives of Policyholders of Florida, the Florida Association for Insurance Reform (“FAIR”) and the Good Foundation Florida were all on hand for the event.

FAIR Executive Director Jay Neal commended Senate Committee on Banking and Insurance Chairman David Simmons on his good faith effort insofar as SB 1770, but added that he believes that the bill’s current language could be very damaging to the state of Florida.  The clearinghouse provision of SB 1770 is one of the only good provisions in the bill, he said, reminding that Florida’s Citizens Property Insurance Corporation (“Citizens”) shed 300,000 policies last year, and that he believes the State-run insurer does not need to be changed in statue and legislation is not necessary. 

Further, Mr. Neal suggested, Florida’s Legislature should let any future clearinghouse takeouts take effect for a year and then evaluate their status at the end of that time with the goal of making address any necessary changes.  He added that all 23 provisions in SB 1770 need to be carefully considered on the Senate Floor. 

Sean Shaw, former Florida Insurance Consumer Advocate and now an attorney with the Merlin Law Group, agreed that SB 1770 bill is full of very bad provisions that are dangerous to Florida consumers. 

Jon Lavender, owner of a company called Insurance, Fire and Water Restorations, said that the assignments of benefits provision in HB 909 is an anti-consumer provision that would require consumers to pay 50 percent of damage repair costs up front.  These days, many people do not have the money to pay these expenses up front, he said.

State Representative Mike Fasano agreed that SB 1770 would be detrimental.  Its effects would cripple consumers, contractors and Florida’s real estate market, he explained.   The bill forces homeowners out of Citizens to a private insurer, he said, but if the private insurer later increases rates at renewal, as several “takeout” companies have done in the past, the homeowner would not be able to go to Citizens at the previous rate, since he or she now would be considered a new customer. 

Representative Fasano anticipates that Representatives John Wood or Bryan Nelson may be filing amendments on the House Floor that would add these same bad provisions to HB 909 that were adopted onto SB 1770 last week. 

Mr. Neal reminded that, according to its President and CEO Barry Gilway, Citizens has enough money to pay for a 1-in-50 year storm, which is one as powerful as Hurricane Andrew.  Further, there is only a 1.66 percent chance of a 1-in-100 year storm striking Florida, he said, so therefore, the Legislature could be over-reacting.  He said the clearinghouse concept would likely work and return Florida to a true residual market. 

Mr. Shaw added that the provisions in SB 1770 are simply unacceptable for Florida consumers and disastrous to its market.

 

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