March 28, 2024

Capitol

2010 Legislative Preview: Setting the Table

A look at the key issues that will shape the next session, which starts in March.

Amy Keller | 2/1/2010

Property Insurance

Insured property
Insurers are being hurt on multiple fronts, says the Florida Insurance Council.
[Photo: AP]

Fear Factors

Despite a quiet hurricane season, many of Florida’s property insurers have found their financial situations deteriorating rapidly, says Sam Miller, executive vice president of the Florida Insurance Council. The companies have been negatively impacted by several factors, Miller says, including increased sinkhole loss claims, increased reinsurance costs, larger-than-anticipated mitigation discounts being given to consumers, increases in fraud related to mitigation discounts and the replacement cost methodology used in the state.

Lawmakers are likely to take a hard look at all those issues as they consider any sort of comprehensive property insurance reform package.

Fraud

Chief Financial Officer Alex Sink has asked Rep. Bryan Nelson (R-Apopka) and Sen. Garrett Richter (R-Naples) to file a bill that would create a major financial crimes bureau in the Division of Insurance Fraud and make other organizational changes to enhance the state’s ability to fight financial crimes. It would also add money laundering as a crime under this unit’s investigatory jurisdiction, creating a “Division of Insurance Fraud and Financial Investigations.”

Newton
Bill Newton, executive director of the Florida Consumer Action Network, says deregulation would mean higher premiums.
[Photo: AP]

Dereg Redux

Following State Farm’s move last year to cease writing policies in the state, lawmakers passed HB 1171, the Consumer Choice Act. Authored by Rep. Bill Proctor (R-St. Augustine) and Sen. Mike Bennett (R-Bradenton), the bill would have allowed insurance companies with a net worth of $150 million or more to market residential insurance policies whose rates would not have been subject to regulatory review.

Gov. Charlie Crist vetoed the legislation, saying it would have effectively allowed insurers to “cherry-pick, or sell only to profitable policyholder risks, while at the same time off-loading their undesirable policyholders that are higher risk to their competitors and Citizens Property Insurance Corp.”

Rep. Bill Proctor plans to try again this year to push through a bill that would allow insurers to market homeowners policies that would not have to be subject to regulatory review.
[Photo: AP]
Proctor

While State Farm recently reached a compromise with state regulators and will remain in Florida, Bennett and Proctor are renewing their push for a Consumer Choice Act this year with at least one significant change. While the 2009 bill would have only applied to about 20 financially strong insurers, the 2010 version would open the bill to all insurance companies offering homeowners’ coverage.

The bill’s backers include Florida TaxWatch, Associated Industries of Florida and the Florida Association of Insurance Agents, among others.

Bill Newton, executive director of the Florida Consumer Action Network, says that deregulating Florida’s property insurance market would send rates “through the roof.”

Public Adjusters

Miller
Sam Miller, executive vice president of the Florida Insurance Council, says the council is pushing to change the five-year statute of limitations for filing claims to two years. [Photo: Ray Stanyard]

The Florida Insurance Council hopes that an OPPAGA report due out this month on public insurance adjusters will lead to more reforms of the growing industry.

Sam Miller, executive vice president of the Florida Insurance Council, says insurers are concerned about the increasing number of reopened claims being filed up to five years after a hurricane —?a trend that has contributed to making Hurricane Wilma in 2005 the third-most-expensive hurricane on record in the state. “It is puzzling to have a homeowner agree to a settlement from an insurance company. They’re happy. Their home is fixed. But three to four years later, possibly because a public adjuster put a flier in their mailbox, they’ve reopened the claim and found a lot of additional damages.”

One fix for the problem that the Florida Insurance Council would like to see is for the state to change the five-year statute of limitations for filing new claims to two years after the date of loss. The Florida Insurance Council has recommended other changes as well, including a ban on in-person and telephone solicitation by public adjusters and a requirement that public adjusters execute proofs of loss.

But the Florida Association of Public Insurance Adjusters says that any such changes will only end up hurting consumers, who rely on public adjusters to help them get the money that is due to them. “The bottom line for any insurance legislation should be whether it protects the rights of consumers to receive full and fair compensation for their losses. You don’t get there by restricting consumer access to the only professionals licensed and trained to serve as their advocates,” says FAPIA President Lenny Bauman.

Tags: Politics & Law, Government/Politics & Law

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