Legislative Update: Week Ending April 29

One week remains in the 2007 Regular Legislative Session and several outstanding insurance-related issues are yet unresolved.  Additional insurance bills that could pass during the final week are still pending in both the House and Senate.

It appears that that the property insurance “Glitch Bill” and bills relating to automobile no-fault insurance will be contested until the final days of Session.

During this time, the Legislature also must pass the budget, which will likely occur on the final day of Session–Friday, May 4, 2007.  In order for a bill to become a law, it must pass both the House and Senate with identical language and then be signed by the Governor.

With regard to Florida’s property tax crisis, the House and Senate could begin full Floor debate on the issue, where every Legislator will have an opportunity to speak and vote, respectively.  However, neither Chamber has yet to find common ground on property taxation methodology.  Meanwhile, the House is moving forward with Speaker Marco Rubio’s championed plan to eliminate property taxes by increasing the sales tax by 2.5 percent, while the Senate likely will be unwilling to agree to any sales tax increase.

Below is a brief summary of the House and Senate Floor activities for the week ending Friday, April 27, 2007 and our expectation of next week’s developments:

 

Automobile No-Fault Bills

The Senate passed SB 1880 by Senator Bill Posey (R-Rockledge) 37-0 on Wednesday, April 27. The bill extends existing PIP legislation until 2012. The bill also requires the Department of Financial Services to conduct a comprehensive study of the Florida no-fault system and provides $2.3 million for fraud combat and enforcement of PIP laws.  Having passed the Senate, the bill is now in House Messages, awaiting consideration by the full House.  However, we expect the House to hear its newest version of no-fault legislation instead, which is PCB 07-07.  Currently, PCB 07-07 is calendared for Monday, April 30 in the House Policy and Budget Council.

Thus, the Senate and House no-fault bills remain vastly different, and it is unclear at this point which proposal, if either, will prevail.

 

Property Insurance Glitch Bills

There has not been any new formal action on property insurance since the House passed HB 7077, also known as the “Glitch Bill,” on Tuesday, April 26.  The “Glitch Bill” is so-named because it addresses some of the “glitch” issues within HB 1A that passed during the January 2007 Special Session that tackled Florida’s insurance crisis.

HB 7077 is now in Senate Messages awaiting consideration by the full Senate.

Now, the Senate can either take up HB 7077, or its own version of the “Glitch Bill,” SB 1866, by Senator Posey which passed the Senate Banking and Insurance Committee–one of its two Committee assignments–with a 9-0 vote.  Currently, SB 1866 is calendared for its second assigned Senate committee, General Government Appropriations.

Both HB 7077 and SB 1866 were extensively amended during previous hearings with both insurance-favorable and unfavorable provisions.  Some of these considerations include: allowing insurers to purchase additional coverage from the Hurricane Catastrophe Fund, providing an exemption that insurers must pass on savings as set forth by the presumed factors, requiring “pup” insurers writing property insurance to maintain $50 million in surplus in order to keep their certificate of authority, clarifying the use and file rate filing provisions of HB 1A to apply to residential properties only, requiring insurers to reevaluate mitigation discounts every five years, and limiting the application for the 90-day “pay or deny” provision to residential property claims only.  Some or all of these provisions could be included, excluded, or amended in a final bill.  At this time, it is unclear whether the House and Senate will be able to agree on final language.

 

Citizens Property Insurance Corporation Bills

SB 2498 by Senator Rudy Garcia (R-Hialeah) is on the Senate Special Order Calendar for second reading on Tuesday, May 1, 2007.  This bill allows Citizens Property Insurance Company (Citizens) to become more competitive with the private insurance market.  As such, it has become a divisive issue among legislators serving inland districts, where fewer Citizens policies are written, versus legislators whose constituents reside along the coast. 

The companion bill, HB 1267 by Representative Julio Robaina (R-Miami) is still on the House Calendar.  However, HB 1267 was amended several times in the Policy and Budget Council on April 23, 2007.  These amendments substantially limit the ability of Citizens to compete with private industry–the bill’s original intent.  Governor Crist has stated that he would like to see an extension of the Citizens rate freeze, and the threshold for Citizens’ enrollment eligibility reduced, if not eliminated. 

We expect that the Senate will pass its version of SB 2498 and send it to the House for consideration during this final week of the Session.

 

Other Issues Considered on Friday, April 27, 2007

• House Bill 517 by Representative Greg Evers (R-Milton) was read a second time. The bill exempts members of the Armed Forces who are on active duty outside Florida from providing proof of financial responsibility as the owner of a motor vehicle.

 

• SB 1624 by Senator Mike Bennett (R-Bradenton) passed 38-0. The bill amends the laws regarding owner-controlled insurance programs. The House companion, HB 843 by Representative Dave Murzin (R- Pensacola), was temporarily passed. The House can now either take up SB 1624 or reconsider HB 843.

 

• SB 1206 by Senator Jeff Atwater (R- Palm Beach) passed the Senate 39-0.  The bill requires motor vehicle manufacturers to provide reasonable compensation to motor vehicle dealers for warranty “work” and “repairs and service.”  It also clarifies that “labor and parts’’ are included in warranty work, repairs, and service. The bill could have the effect of increasing costs to manufacturers by requiring them to provide additional compensation to dealers without the ability of using a surcharge to cover their costs.  The bill is now in House Messages, where it is available for House consideration.

 

• SB 482 by Senator Mike Fasano (R-New Port Richey) was substituted for HB 615 by Representative Peter Nehr (R-Tarpon Springs) and passed the Senate 39-0.  It previously passed the House and is now ready for the Governor’s signature.  This bill specifies that the voluntary $1 check-off on motor vehicle registrations distributed to the Florida Heart Research Institute is to stop heart disease.  The bill also requires the Department of Highway Safety and Motor Vehicles to include a check-off for a voluntary $1 contribution to the Children’s Hearing Help Fund on each motor vehicle registration and renewal form.

 

• SB 2836 by Senator Lee Constantine (R-Altamonte Springs) passed the Senate 35-0.  The bill requires the Office of Insurance Regulation, in consultation with the Department of Community Affairs, to conduct a wind-loss mitigation study to evaluate wind storm loss relativities. The bill also authorizes $1 million to be used in part for the wind mitigation study. The bill is now available for the House’s consideration.

 

• SB 2234 by Senator Stephen Wise (R- Jacksonville) is on the Special Order calendar and read a second time in the full Senate.  The bill requires a home inspector to maintain a minimum of $300,000 in commercial general liability insurance. It also requires a mold assessor and mold remediator to carry a minimum $1 million in general liability coverage.

 

We will continue to provide informational updates throughout Session, which concludes Friday, May 4, 2007.

Please do not hesitate to contact this office should you have any questions or comments.