2009 Fla. Legislative Preview
As legislators look to slash regulations to encourage growth, environmentalists worry about losing hard-won protections from pollution. Here's a look at what lawmakers hope to tackle.
Other Key Issues
» Property Insurance
Florida’s property insurance market will remain a priority, particularly the health of the hurricane catastrophe fund. The CAT fund’s ability to sell bonds to meet its reinsurance contracts has come into question, even after a $224-million deal with Warren Buffett’s Berkshire Hathaway in July guaranteeing the company will purchase up to $4 billion in bonds if a massive storm hits. In October, the Advisory Council to the Florida CAT fund warned that the fund would have been able to deliver less than half the $28 billion in reinsurance it sold to Citizens Property Insurance and private insurers during the 2008 storm season. The bond market has only tightened since then, says Tara Klimek, communications director for state CFO Alex Sink.
At the current exposure level of $28 billion, Floridians could face $1.8 billion in assessments each year for 30 years if a catastrophic storm strikes, Klimek says. In that light, Sink would like to see more risk shifted to the private market. Sink will also push for legislation that would allow the Florida Cabinet to adjust reinsurance prices and exposure levels to better manage risk.
Reforming the so-called CAT fund is “critically important to Florida,” says Sam Miller, executive vice president of the Florida Insurance Council. “Everybody recognizes this as the No. 1 crisis facing the state.”
The Citizens Property Insurance Mission Review Task Force is recommending that the Legislature end Citizens’ three-year rate freeze and allow it to hike rates to a more actuarially sound level in 2010. The task force says any annual increase should be capped at 10% on average statewide and no more than 15% for any given territory or 20% for any single policy. The panel also recommends that the Legislature bar Citizens from covering buildings in erosion-prone coastal areas and require incoming policyholders and their agents to certify that they can’t find coverage in the private market or that the only available coverage is more than 15% higher than Citizens.
» The Housing Crisis
» Business Priorities
“The A-No. 1 issue we are asking the Legislature to do is to do no harm. Many of the agencies are looking at new rules. What businesses need is stability and predictability, and they need to know what they can count on from their government.” — Mark Wilson, president and CEO, Florida Chamber of Commerce
Other Chamber priorities include:
» Revision of the state’s workers’ compensation law
» A permanent fix to a glitch in corporate tax law that unintentionally deprives corporate income taxpayers of certain tax benefits, specifically depreciation deductions, they enjoyed prior to 2008
» Lowering the assessment cap on non-homesteaded property from 10% to between 3% and 5%
» Lowering the burden of proof required to challenge a property appraiser’s valuation of real estate
» Enacting a law requiring transparency in government spending
» Challenging the Department of Community Affairs’ proposed rules for the Rural Lands Stewardship Program. The chamber says the proposed rules, meant to create a comprehensive growth management policy for rural areas, require too much detail and employ a methodology that is too complex. The process will be so expensive and uncertain that communities won’t participate, the chamber claims.
Sen. Garrett Richter, a Naples banker who chairs the Banking and Insurance Committee, says state lawmakers will have to address Florida’s foreclosure crisis. “We’re going to have to have a debate surrounding how we can facilitate processes to make sure that abandoned properties don’t take down the economic value and safety,” says Richter. At the same time, he says, the state needs to find a way to help “bona fide homeowners” who come up against circumstances, such as a job loss or increased interest rates, which prevent them from making their mortgage payments. Those cases, he says, should be handled differently from property that has simply been abandoned.
» Workers’ Compensation
Business advocacy groups say workers’ comp rates could escalate following a 2008 Florida Supreme Court decision that struck down a cap on attorney fees in workers’ comp cases. The court concluded that claimant attorneys are entitled to “reasonable” fees in workers’ comp insurance cases, rather than a fee formula put in place in a 2003 package of reforms. While rates in Florida have fallen 60% following the 2003 reforms, the National Council of Compensation Insurance, which represents 200 workers’ comp insurers in the state, recently proposed an 18.6% rate hike that it says companies will need to cover the increased attorney fees associated with claims. Business groups say any increase in costs for workers’ comp insurance could prove disastrous for companies already reeling from the recession.