TALLAHASSEE — Sweeping property insurance reform bills that critics deride as a gift to the industry are getting blessed by Florida lawmakers.
A Senate proposal passed its final committee Tuesday morning and is headed for a floor vote.
Later in the day, a similar House measure sailed through its first committee hearing.
Among other things, the Senate bill would free insurance companies from a requirement to offer comprehensive sinkhole insurance. Opponents argue that means that no private insurers would offer sinkhole coverage, so the bill requires state-run Citizens Property Insurance to offer it.
That didn't sit well with Sen. Gwen Margolis, D-Miami.
"We are going to have a full-blown disaster one day," she said. "This is simply taking all of the people who have sinkhole coverage in their community and putting them in Citizens. Then in another bill we're raising the cost of Citizens."
Margolis called it the most anticonsumer bill offered up by the Legislature.
But Garrett Richter, R-Naples, the sponsor of SB408, said the point is to make Florida more appealing to private insurers, who say they can't charge high enough premiums to cover potential losses and they can't compete with Citizens' low rates.
"The ultimate goal of this bill is to increase competition, to attract underwriters into the Florida market, to attract capital to Florida, to reduce fraud," he said.
Sen. J.D. Alexander, R-Lake Wales, said the growth of Citizens, which has 1.3 million policyholders, is potentially the "biggest single financial crisis facing this state."
"If we ever have a major storm, we are in deep trouble," he said.
Citizens officials have warned their premiums aren't high enough to cover all their payouts in the case of a huge hurricane or series of storms. That means all insurance policyholders, including those that aren't in Citizens, would have to pick up the tab.
To underscore that fact, Alexander introduced an amendment to SB408 that would change the name of the state-run insurer to the Taxpayer Funded Property Insurance Corporation. The measure passed, though it's not likely to survive a vote of the full Senate.
John Thompson, a Spring Hill resident, panned the entire bill, saying homeowners had no voice in developing the legislation. Private insurers, he said, are not about to go under. Thompson said his homeowners policy was canceled by four private insurers, forcing him into Citizens, even though hurricanes and sinkholes are not new phenomena in the state.
"This Legislature is condoning cherry-picking. Let them write what they want, when they want and charge what they want," he said, pointing out that State Farm offered to cover his automobile even though it's parked in the garage of a home the company won't cover.
"They should not be knocking on your door, the Florida Legislature, asking for handouts and crying about losing money," he said. "Yes, losing money on a specific market product possibly, but not on the verge of going broke. No way. No how. It's greed."
The bill passed the Senate Rules Committee by a 9-3 vote, with Republicans Anitere Flores, R-Miami and Dennis Jones, R-Seminole, voting with Margolis against it.
The House bill, which also lets private insurers off the hook for sinkholes, passed by a vote of 12-3 in the Insurance and Banking Subcommittee.
Rep. Evan Jenne, D-Dania Beach, cast one of the dissenting votes, saying HB803 would result in a feeding frenzy by insurance companies on Florida policyholders. Reps. Janet Cruz, D-Tampa, and Perry Thurston, D-Plantation, also voted against it.
Janet Zink can be reached at [email protected] or (850) 224-7263.