Florida Senate Committee on Banking and Insurance Approves FIGA Bill, Reviews Options for Downsizing Citizens Property Insurance

At its meeting today, February 18, 2014, the Florida Senate Committee on Banking and Insurance (“Committee”) took up SB 346 by Senator Tom Lee, which revises how the Florida Insurance Guaranty Association (“FIGA”) levies and collects assessments.  During discussion on the bill, Senator Lee offered an amendment to give the FIGA Board of Directors authority to levy assessments to be paid month to month if FIGA has six months of liquidity available.  This would eliminate the concern the concern that FIGA may have to bond to pay claims.  The amendment was adopted, and the Committee passed the bill unanimously as a committee substitute. 

The Committee then discussed proposals designed to shrink the size and exposure of Florida’s Citizens Property Insurance Corporation (“Citizens”).  These proposals include:

• Prohibiting Citizens from writing new commercial residential policies in its Coastal Account
• Shifting five percent of the policyholder surcharge from Citizens’ Personal Lines Account to the Coastal Account
• Applying a 15 percent limit on rate increases to commercial nonresidential policies
• Allowing surplus lines insurers to participate in Citizens’ Clearinghouse
• Allowing commercial residential policy applicants to participate in the Clearinghouse
• Annually requiring Citizens to report its bonding capacity, claims-paying capacity and cash on hand
• Placing limitations on public adjuster fees
• Removing the requirement that insurers offer a $500 deductible for non-hurricane deductibles

Committee Chairman David Simmons said that the recommendations would be drafted into a proposed committee bill to be discussed at a future Committee meeting.

To view the complete list of recommendations, click on the meeting packet here and go to page 57.

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