Insurance Bills Delayed in Senate Committee
Apr 18, 2011
The following article was published in the Sunshine News on April 16, 2011:
Insurance Bills Delayed in the Senate Committee
By Gary Rohrer
Various bills designed to shore up the private insurance market and lure more companies to Florida are on shaky ground.
Two bills backed by Sen. Alan Hays, R-Umatilla, that would allow private companies to raise their rates as much as 10 percent statewide without the approval of state regulators and prohibit Citizens Property Insurance, the state-run insurance company, from issuing policies on structures valued at $1 million or more, were postponed Friday during the Senate Budget Committee hearing.
Other senators were skeptical of the bills, but Hays said he just wants to allow the free market a greater say in the determination of insurance rates.
“One of the reasons we have the problem we have in Florida today is that we have tried to blend a regulated market and a free market,” Hays said.
But other senators, including Republicans, balked at the idea of allowing insurers to raise rates without the approval of the Office of Insurance Regulation, even with the 10 percent cap.
Private insurers have long complained that Citizens has been able to offer lower rates that were not actuarially sound, than profit-motivated companies do. Thus, a state-run company that was designed to offer homeowners access to the insurance market where there were limited options, has become the largest insurer in the state.
Hays says the real trouble will come when a large, one-in-100-year storm hits the Sunshine State, running through Citizens’ reserves and leaving taxpayers with a $14 billion bill.
“I would much rather, today, explain to the constituents why their premium has to go up, than to try to explain to them why there’s no money to pay the repair bill on their homes,” Hays said.
Sen. Thad Altman, R-Viera, however, said that the problem lies with the regulators, not the regulations themselves.
“Shouldn’t we be looking at that and what the OIR is not doing, allowing insurance companies to set not actuarially sound rates?” Altman said.
Hays said he still has hope for his bills, but they have a long way to go and the scheduled end of the legislative session is not far off. The Senate will not meet next week due to the Easter/Passover holidays, which leaves just two weeks for the bills to get through two more committees each and get to the floor before the end of the session on May 6.
He said greater awareness from his fellow senators on the issue, not placating amendments, will help push the bills through.
“We just got to get a better understanding of the membership and make sure they know what’s going on. Insurance is a very complicated subject. It’s easily confused, and the educational challenge is significant,” Hays said.
A different insurance bill that eliminates the requirement for property insurers to offer sinkhole insurance, backed by Sen. Garrett Richter, R-Naples, has had more success, and is ready for a floor vote.
Find this article here: http://www.sunshinestatenews.com/story/insurance-bills-delayed-senate-committee