Major property insurance revamp will be put on fast track

The following article was published by “The Current/Florida LobbyTools” on November 29, 2010:

Major property insurance revamp will be put on fast track

By Gary Fineout

A comprehensive measure to revamp Florida’s property insurance market — which has been vetoed twice in the last two years by Gov. Charlie Crist — will be revived for the upcoming session and placed on a fast track.

Sen. Garrett Richter, R-Naples and chairman of the Senate Banking and Insurance Committee, says he wants to have the legislation up before his committee by January. Richter said one of the reasons he wants to do that is to meet the edict of Senate President Mike Haridopolos that all bills should go through at least three committees before they voted on by the full Senate.

But Richter also said he wants to end the practice of having lawmakers wait until the last day of session before a major insurance bill is passed.

“We’re going to work quickly instead of leaving until it the last 14 days in session so this Legislature would not be accused of rushing the process,” Richter said.

The starting point for the 2011 insurance bill will be SB 2044. That measure contained a whole long list of changes, including making it easier for insurers to get rate hikes of up to 10 percent to cover expenses such as the cost of reinsurance or inflation. The bill also put a three-year limit on when someone can file a claim from a hurricane and it changed how much insurers have to pay out initially for structural damage.

Crist vetoed the bill last June despite a plea from Insurance Commissioner Kevin McCarty that he sign the bill into law to cut down on some of the expenses that insurers say is making it hard for them to do business in Florida. Crist, however, called the legislation “anti-consumer” and said it was wrong to allow for rate hikes during tough economic times.

Some in the insurance industry wanted the GOP-controlled Legislature to consider a veto override during the recent special session. But Sam Miller of the Florida Insurance Council said that while there were a lot of “important” items included in SB 2044 some people in the industry took the position that it could be better to start over for the 2011 session.

While Governor-elect Rick Scott did not support complete deregulation over insurance rates, he is in favor of a free-market approach. His own insurance plans also call for major changes to Citizens Property Insurance Corp., the state-created insurer which has more than 1.26 million policyholders.

Richter agreed that there is a need to reduce the size of Citizens — which can place a surcharge on most insurance bills in the event of major losses. But he added that “much easier said than done.”

The bill that passed this past year did not address sinkhole claims, which is becoming a bigger and bigger concern for carriers. The final bill also did not include a change in how much in replacement costs insurers must initially pay for personal items. There will likely be a push to address both those issues in a new bill.