TALLAHASSEE — Several bills that empower the insurance industry this session pose a significant threat to consumers, with little opposition from the Legislature in sight, lawmakers and consumer advocates warned Tuesday.
"In my 17 years as a legislator, I've never seen so many anticonsumer bills that are moving through the process so quickly, and it concerns me greatly," said Sen. Mike Fasano, R-New Port Richey. "And frankly it should concern every rate-payer."
He and Rep. Rick Kriseman, D-St. Petersburg, spoke at a news conference of Policyholders of Florida, a new bipartisan group led by former insurance consumer advocate and Tampa attorney Sean Shaw.
"There is nothing partisan about being repulsed by unregulated rate hikes and the raiding of consumer protections," Kriseman said.
Kriseman had particular disdain for SB 408, a sweeping property insurance reform bill that would strike the requirement that companies provide sinkhole coverage in many cases and shorten the time period for claim filing. He held up a copy of the bill for news cameras, flanked by a rainbow of sticky notes.
"In my five years of service in the Legislature, I can't recall a bill that was so obviously written by the industry and not by a legislative staff," Kriseman said, calling it the "holy grail" for the property insurance industry.
Fasano has introduced multiple amendments to make the bill more friendly to consumers. He had success on two big ones. One requires insurers to get state approval for rate changes before implementing them. Another requires companies to pay replacement costs of lost property upfront, as they do now, instead of paying just actual value until provided proof of expenditures by claimants.
The amended bill passed on a 12-8 vote Tuesday. The bill now has just one more committee stop before it hits the Senate floor. The House has not taken up its companion.
Fasano said he plans to introduce more consumer-friendly amendments when the bill hits the Senate floor.
Kriseman, Fasano and Rep. Carlos Trujillo, R-Miami, called out four other bills Tuesday as "big insurance giveaways":
• SB 1714/HB 1243, which allows Citizens Property Insurance Corp. to raise its rates as high as 25 percent annually.
• SB 1462/HB 4115, which prevents the insurance consumer advocate from giving grades to insurance companies.
• SB 1330/HB 0885, which takes away the Office of Insurance Regulation's ability to approve rate hikes and allows companies to increase rates by 30 percent or less each year.
• SB 1592/HB 1187, which limits a consumer's ability to sue his or her insurance company.
Samuel Miller, executive vice president of the Florida Insurance Council, told reporters after the news conference that rate hikes are inevitable even if the bills do not pass. He also said that the sweeping reform bill, SB 408, is supported by the Office of Insurance Regulation and Chief Financial Officer Jeff Atwater.
He said the hikes were needed because the industry has failed to build a surplus even after five years without damaging hurricanes. Why? Most of the sinkhole claims filed in Florida's "Sinkhole Alley," Pasco and Hernando counties, he said, are fraudulent. And late-filed hurricane claims are coming in "like we've never seen before." For that he blames eager public adjusters who advertise in South Florida.
Shaw, who joined Tampa's Merlin Law Group after working on Alex Sink's gubernatorial campaign, suggests that a more consumer-oriented approach to repairing the marketplace would be to define a sinkhole, thus knocking out hairline-crack claims that are fraudulent but retaining people with valid sinkhole claims.
He understands there are problems in the industry, but said these bills are a "drastic overcorrection."