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From the staff of the Tampa Bay Times

Breaking down insurance



Buzz is there's going to be a deal on property insurance legislation, although Buzz has yet to see new House amendments this morning. But here's a report on some of the more pressing negotiations completed late last night or in recent days.

Sen. Jeff Atwater R-North Palm Beach and Rep. Dennis Ross, R-Lakeland, have been talking in quiet negotiations for two weeks on a package that Atwater championed in the Senate as a continued crack-down on insurers that began last year. The House finally showed their hand in strike-all amendments filed Tuesday.


“I’m still optimistic, but it was a long day,” Atwater said late Tuesday, while adding he’s been dealing with a lot of “push back” from House negotiators. He also stressed that trades are "compromises" not "watering down" his bill.

A major sticking point today is that the rules require approval from two-thirds of the House, which means getting Democrats on board, to even introduce the property insurance package left on the special order calendar from yesterday.

Here's a partial break-down and analysis of the current insurance package, (subject to change), according to legislation filed Tuesday and interviews with Sen. Jeff Atwater and Rep. Dennis Ross last night.

Last year, the Legislature passed a temporary prohibition set to expire this year on "use and file," which had allowed property insurers to first use their rate hikes than ask regulators for them later. Atwater agreed as of Tuesday to back off efforts to permanently get rid of "use and file" measures. Instead, Atwater settled for extending the ban on "use and file" for one more year, with the new legislation pushing the expiration to Dec. 31 2009.

In return, the House agreed to permanently get rid of arbitration panels, which used to be insurers preferred method of settling disputes with regulators about rate hikes. Current laws temporarily get rid of arbitration panels, which Atwater and OIR have criticized, saying they give insurers the upper-hand.

The House, Ross said, was willing to get rid of arbitration panels, in return for making it quicker and easier to appeal regulator's denials of rate hikes through the Division of Administration Hearings (DOAH), which is currently the only appeal's process and is infamous for taking a really long time (think more than a year.)

However, that DOAH appeal's process is slated to change under the House plan. Law judges would have to follow new specific guidelines for considering the appeal, such as whether actuarial practices were followed, whether profits are reasonable or excessive, whether reinsurance purchases are reasonable or excessive. In addition, law judges, who now pretty much give an up or down vote, would be able to recommend a "modified" rate change.

Atwater said he was willing to give up a provision, which Atwater called a "heavy lift" for the House. Under the Senate bill, the legislation would have made it easier to sue insurers for anti-trust violations in Florida. Nationally, insurers are pretty much shielded from anti-trust allegations.

In return, Atwater said he was pushing the House to agree to a provision which would allow policyholders who file "undisputed" claims, which under current law are supposed to get paid within 90 days, a new way to sue insurers that don't pay up on time. Last night, Ross said the parties were working on language that would lay out "excusable reasons" for claims that don't get paid on time.

The bill includes Senate language that requires insurers to use hurricane models approved by the state hurricane modeling commission. But it also includes language that allows insurers to be able to set (or even hike?) rates without fear of getting disapproved if they buy reinsurance that prepares them against a fairly expensive 1-in-a-250-year storm.

Left unresolved last night but probably figured out by now:
Ross said the House felt strongly that insurance regulators should have to promise or "certify" under oath not to reveal "trade secrets" and also that actuaries should have to "certify" under oath that their recommendations are true and not misleading. Atwater said he was very concerned about state employees facing possible perjury charges under the House proposal. Buzz hears that there has been a compromise on this but hasn't seen the language.

UPDATE: Buzz hears that an Atwater measure to allow Citizens Property Insurance Corp. to stop writing wind-only policies starting this summer (the state-insurer would still write overall policies insuring against wind, theft and fire) is not happening.

As for terms Republicans have agreed to:

*Borrowing $250 million from Citizens to fund a low-interest loan program for start-up private insurers. The governor doesn't like this.

*UPDATE: Extending the Citizens rate freeze for one more year.

* Forcing insurers to give regulators notice 90 days prior to dropping more than 10,000 policies.

[Last modified: Wednesday, September 15, 2010 10:55am]


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