Senator Gaetz Announces Co-Sponsorship of Homeowners Bill of Rights

Above:  Senator Don Gaetz

Florida Senator Don Gaetz released the information below on April 4, 2008 regarding his co-sponsorship of Senate Bill 2860, which has been dubbed the “Homeowners Bill of Rights.”

CS/SB 2860, sponsored by the Senate Banking and Insurance Commitee, Senators Jeff Atwater and Steve Geller, is also co-sponsored by Senators Mike Fasano, Rudy Garcia, and Dennis Jones (in addition to Senator Gaetz).

CS/SB 2860 revises legislative findings with respect to the Insurance Capital Build-Up Incentive Program and the appropriation of state funds for surplus notes issued by  residential property insurers. The bill subjects the business of insurance to the Florida Anti-Trust Act and prohibits an insurer from failing to promptly provide to the insured estimates of damage and a good faith explanation of the insurer’s evaluation.  The effective date of the bill would be upon becoming law  except as otherwise provided.

Should you have any questions or comments, please do not hesitate to contact this office.

 

Senator Gaetz co-sponsors Atwater legislation to change how insurance companies operate

Republican senators committed to changing how insurance companies treat families and businesses have introduced a “Homeowners Bill of Rights” in the Florida Senate. 

Senator Jeff Atwater (R-North Palm Beach), President-designate of the Senate, was joined today by Senator Don Gaetz (R-Niceville) in pushing a series of reforms that will make it harder for companies to cancel policyholders for no reason and increasing the penalties for violations of law by insurers.

The introduction of Senate Bill 2860 came as the First Circuit Court of Appeals ruled against AllState Floridian Insurance Company for refusing to turn over documents to state investigators looking into violations by the insurance giant.  The court ruled that the state’s Office of Insurance Regulation was correct in suspending AllState from doing business in Florida.  The ruling also pointed out the extensive evasions used by AllState in an attempt to not comply with subpoenas as well as requests for information by the Senate Select Committee on Property Insurance Accountability.

Atwater and Gaetz both serve on the Select Committee and had aggressively questioned executive officers of the company under oath during committee hearings.  Senator Atwater exposed an apparent attempt by company officers to change hurricane modeling assumptions in order to avoid providing policyholders with premium reductions called for by the Legislature in 2007.  Senator Gaetz had amended the 2007 law to require that 100 percent of savings generated by the availability of less expensive reinsurance had to show up in lower costs to ratepayers. 

“This is a clear message to big insurance,” the Republican President-designate said.  “You’re not above the law and you’re not going to get away with abusing Florida consumers behind the cover of trade secrets and legal maneuvers.  This case reveals the lengths to which some companies will go to conceal how their business practices are purposely structured to never give their customers a fair shake.”

To read the full text of the appeals court decision, click here.

“The Homeowners Bill of Rights is a result of many hours of putting insurance executives and actuaries under oath and exposing the good, the bad and the ugly about property insurance in Florida,” Gaetz said.  “AllState’s chief executive officer pretended not to know whether his corporation had made significant profits or his stock price had risen even as he was using dire financial straits as a justification for huge rate increases and policy cancellations.  The testimony was an embarrassment to the good people in our state who are AllState agents or employees.”  Under questioning by senators, all four of the principal officers of AllState Floridian admitted they didn’t live in Florida or even work in the state. 

During the hearings, Gaetz drew out of one company’s executives an admission that, instead of passing savings along to policyholders, they bought back a billion dollars of their own corporate stock.

Transcripts of the hearings of the Select Committee are available on line, click here. 

Principal features of the legislation introduced by Atwater and co-sponsored by Gaetz include:

* Increasing penalties for violations of the Insurance Code
* Changing standards and procedures for property insurance rate filings
* Applying antitrust laws to the business of insurance
* Prohibiting unfair claims handling practices
* Freezing rates and changing coverage and assessments for Citizens Property Insurance Corporation
* Revising Windstorm Mitigation premium credits
* Giving the Office of Insurance Regulation more authority to fine insurance companies
* Requiring approval of companies’ plans to cancel policyholders
* Revising conditions for state-funded surplus notes to insurers

To read the full text of the Homeowners Bill of Rights, click here.

Senator Atwater said in a statement on April 4 that “This decision of the appeals court shows once again why the fundamental insurance reforms in the Homeowners Bill of Rights are so urgently needed,” and that is why Senator Gaetz is co-sponsoring this important legislation and will work tirelessly to see that it passes.

“The Select Committee hearings showed not only the underside of the insurance industry but also gave us the opportunity to see good business practices by some companies,” Senator Gaetz said.  “The Homeowners Bill of Rights will support and affirm those who are treating our citizens fairly just as it will hold accountable those who have profited unduly.”

 

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