Senate Banking and Insurance Committee Meeting re Property Insurance 04/07/06

The Senate Banking and Insurance committee held an all day meeting today to discuss and debate proposed bills relating to property insurance. The committee addressed two bills, including a bill concerning sinkhole claims and a bill relating to Citizens Property Insurance Corporation (Citizens), the Florida Hurricane Catastrophe Fund (FHCF), and additional property insurance issues.

The first half of the meeting was dedicated to debating Senator Fasano’s bill, relating to sinkholes (Senate Bill 286). The bill provides certain procedures to evaluate the existance of a sinkhole and an alternative dispute resolution process for sinkhole claims. The committee engaged in a debate regarding an amendment to the sinkhole bill, which would have altered the alternative dispute resolution process currently in the bill. The amendment, which was defeated by a 5 – 4 vote, would have allowed a plaintiff to recover attorneys fees in cases where the plaintiff challenged a negative sinkhole evalutation an won at trial, and would have also provided for additional “evaluators” for use in sinkhole claims. The bill was amended however, to allow an insured to recover up to $2,500.00 in attorneys fees if the insured uses an attorney during the evaluation process and a sinkhole is found. Notable comments included a comment made by Senator Campbell and Senator Alexander, who both suggested that sinkhole coverage be optional coverage. Senator Fasano’s bill passed unanimously.

The committee members debated the proposed bill on property insurance, during the second half of the meeting (Senate Bill 1980). Of particular interest was an amendment relating to limited apportionment companies that would allow limited apportionment companies to purchase up to $10 million from the FHCF at a rate of 50 percent rate on line. Although this amendment was withdrawn after much debate, Comissioner McCarty “reluctently endorsed” this amendment, and testified that there is no private market below the FHCF.

Senate Bill 1980 also includes measures intended to depopulate and reduce the potential for deficit assessments in Citizens, a 25 percent rapid cash build up factor for the FHCF, changes to the insurer rating law and provisions that address other property related issues such as the Florida Insurance Guarantee Association and emergency orders.

For more information and details on the legislation, please use the web link below to review today’s committee packet. Both bills have more committee stops before being available for floor action. Please feel free to contact this office with any questions or concerns you may have.

http://static.lobbytools.com/press/Senate_Banking_and_Ins_200647_9.pdf

Regards,

Katherine A. Scott