Senate Banking and Insurance Committee Holds Action-Packed Meeting; Governor Crist Makes Special Appearance To Promote Citizens Expansion

The Florida Senate Banking and Insurance Committee, chaired by Senator Bill Posey, met on April 9, 2007 and discussed five insurance-related bills, the subjects of which included the “Glitch Bill,” property mitigation, personal injury protection (PIP) fraud, the expansion of Citizens Property Insurance Corporation, and surplus lines agents.

Below are brief descriptions of these insurance-pertinent bills and corresponding Committee actions related to these bills during the meeting.

Senate Bill 1866 by Senator Posey relating to Property Insurance passed the committee with several amendments. Colloquially known as the “Glitch Bill,” it makes several changes to HB 1A that passed during the 2007-A Special Session. One amendment incorporated into this bill during yesterday’s meeting requires insurance companies to pay interest, at a rate pursuant to s. 55.03, F.S., on claims that are owed, but not paid within 90 days as required by law. Last year, the interest rate was 11%. Another amendment passed onto SB 1866 yesterday clarifies that the 90-day requirement applies to residential property insurance, including condominiums, but not to commercial property. Of note, SB 1866 provides for continued recognition of the tax-exempt status of Citizens, notwithstanding its expansion.

Senate Bill 1864 by Senator Posey relating to Property Insurance Mitigation passed the committee with several amendments. This bill substantially amends the My Safe Florida Home Mitigation Program, which provides grants for home storm-fortification improvements. Senator Posey noted that fortifying property in Florida against storms is a critical component of the State’s insurance policy. The bill also requires the Florida Office of Insurance Regulation, in consultation with the Department of Community Affairs, to conduct a windstorm mitigation study. One of the amendments that passed changes the study due date from December 1, 2007 to March 1, 2008.

Senate Bill 1882 by Senator Posey relating to Motor Vehicle Insurance passed the committee with one amendment. The bill’s purpose is to address PIP fraud by limiting who can operate a health care clinic. However, the bill appears to exempt chiropractors. The bill also requires individuals who have a financial interest in a health care clinic to undergo criminal background checks. An amendment filed by Senator Don Gaetz, which passed, limits the scope of background checks only to circumstances where applicable clinics handle PIP claims.

Senate Bill 2498 by Senator Rudy Garcia relating to Citizens Property Insurance Corporation (“Citizens”) passed the committee with several amendments. The bill makes several changes to the laws regulating Citizens:

• It authorizes Citizens to offer multi-peril and wind-only coverages in non-high-risk areas.
• It prohibits in future the ownership of a domestic residential property insurer as a wholly-owned subsidiary of the national insurer and provides for the expiration of any such existing insurers.

After industry representatives testified in opposition to the bill, Governor Charlie Crist, making a personal appearance, spoke in favor of the proposed legislation. Specifically, the Governor thanked several legislators and staff who worked on the bill and noted that the bill would lower insurance rates for Floridians.

Senate Bill 1742 by Senator Mike Fasano relating to Surplus Lines/Citizens Property Insurance Corporation was temporarily postponed. The bill requires that agents who sell surplus lines homeowners’ insurance provide those customers who also are eligible for coverage through Citizens with a premium rate quote from Citizens before selling a surplus lines policy. After industry objection, the bill was temporarily postponed because Senator Fasano was not present to defend his bill.

Copies of SB1882, SB1866 and SB 1864 are attached for your review.

The above information is intended to be a brief summary of the actions and matters discussed during these meetings and assemblies, and is not intended to be a comprehensive analysis. We can provide additional information upon request. In the meantime, we will continue to monitor the progress of these and the other bills relating to Florida’s insurance laws.

Should you need additional information, or have any questions or comments, please feel free to contact this office.