CORRECTION: Florida House Session Report–March 29

The Florida House of Representatives held a session on Tuesday, March 29, 2011, where certain insurance related items were discussed.

As previously reported, on March 23, 2011, the House Civil Justice Subcommittee considered House Bill 967 relating to Personal Injury Protection (“PIP”) Insurance by State Representative Mike Horner.  State Representative Matt Gaetz filed a strike-all amendment that would have significantly modified the provisions of the bill.  State Representative called a point of order pursuant to Rule 12.8 challenging the Gaetz amendment as not germane to HB 967, since the bill only addresses claim payment provisions. Committee Chairman, State Representative Clay Ford, ruled that the amendment violated Rule 12.8.

State Representative Marty Kiar appealed Representative Hager’s point of order to House Rules Chairman Gary Aubuchon.  Representative Aubuchon stated that the Representative Gaetz’ proposed amendment would increase the scope of the bill, eliminate five of seven major changes to the PIP law addressed in the bill and would unreasonably alter the nature of the bill.  Based on these findings, Representative Aubuchon opined that Representative Gaetz’ amendment was not germane to HB 967.  House Speaker Dean Cannon concurred with Representative Aubuchon’s ruling and ordered that Representative Gaetz’ amendment be found to be not germane.

CS/CS/HB 99, relating to Commercial Insurance Rates by State Representative Brad Drake, was considered by the House for second reading.  Representative Drake advised that the purpose of the bill was to continue to provide stability in the commercial insurance market, by shifting from a prior approval process to a free market approach with respect to commercial insurance rates.  The bill expands upon legislation passed last year by listing additional lines of commercial insurance that would be exempt from certain rate filing requirements.   Representative Drake indicated that this bill would promote competition, which leads to a healthy market.  The bill would maintain protections relating to rate oversight, as the Office of Insurance Regulation would still be able to determine whether the rates were excessive, inadequate or unfairly discriminatory.

State Representative Rick Kriseman queried Representative Drake on certain additions to the lines of businesses to be exempt from the rate filing provisions.  Specifically, Representative Kriseman noted that the existing law lists a number of specialized lines of business as exempt, and wondered what was the rationale for including a broad based line of business, such as general liability to the exempt list.  Representative Drake replied that the purpose was to maintain the fluidity of markets and allow carriers the flexibility to modernize their rates to meet market conditions.

Representative Kriseman next asked about the rationale for the provision in the bill that would modify the current exemption for commercial motor vehicle insurance from certain rate filing requirements.  Current law provides that commercial motor vehicle insurance covering a fleet of 20 or more vehicles is exempt from the prior approval process.  CS/CS/HB 99 would delete the fleet number requirement and provide that all commercial motor vehicle insurance be exempt from the specific statutory requirements.  Representative Drake responded that the intent of the bill is to provide equal footing and not to have any discrimination in the applicability of this rate flexibility based on fleet size.

Representative Kriseman noted that if one of the claimed benefits of the bill was that it would allow insurers to quickly react to market conditions to provide lower rates to consumers, but asked whether the converse was also true – whether the bill would permit insurers to raise rates quickly as well.  Representative Drake answered that the bill would give insurers the ability to modernize rates upward or downward. 

Representative Mark Pafford inquired whether CS/CS/HB 99 was similar to the bill passed last year, to which Representative Drake replied in the affirmative.  Representative Pafford then asked for the top three lines of insurance affected the bill.  Representative Drake listed all the lines that that would be added; fiduciary liability, general liability; nonresidential property (except for collateral protection insurance as defined in Section 624.4085, F.S.), nonresidential multiperil, excess property and burglary and theft.

As there was no further discussion, CS/CS/HB 99 was ordered to be placed on third reading.        

Should you have any questions or comments, please contact Colodny Fass.

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