Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Legislators talk of insurance reform, deliver tweaks

Sen. Jeff Atwater, R-North Palm Beach, chats on the floor of the Senate with Sen. Arthenia Joyner, D-Tampa, after Atwater’s insurance bill received Senate approval on Thursday.


Sen. Jeff Atwater, R-North Palm Beach, chats on the floor of the Senate with Sen. Arthenia Joyner, D-Tampa, after Atwater’s insurance bill received Senate approval on Thursday.

TALLAHASSEE — Customers of Citizens Property Insurance won't face an increase in premiums for another year under an insurance package overwhelmingly approved by the Legislature on Thursday and sent to the governor.

But the measure, dubbed the "Homeowners Bill of Rights Act," offers no similar protections for customers of private insurers.

And the final product is more a mishmash of changes to the insurance code than any broad reform lawmakers suggested they would seek during dramatic public hearings where they put private insurers under oath.

The bill (SB2860) hikes penalties that regulators can charge insurers and shuts some avenues that insurers have used to raise rates. But it also draws upon the state-run Citizens' reserves for a loan program for startup private insurers.

"So much of what we were really driving through remains in the bill. … It's a very strong, consumer-driven bill," said Sen. Jeff Atwater, R-North Palm Beach, who steered the bill all session but compromised on some anti-industry provisions in recent days to win a compromise with the House.

The measure includes some provisions Atwater pushed for early this session, such as forcing insurers to set rates based on state-approved hurricane models. It also ends an arbitration process, which had been the insurer-preferred way to settle rate disputes.

The bill also halts a practice approved by the 2006 Legislature that has been blamed for some of the runup in rates. Insurers that used reserves to cover potential losses — instead of buying reinsurance — had been allowed to charge customers more for that exposure.

Atwater said he believes those measures will ultimately help lower rates.

Under the loan program, lawmakers agreed to borrow $250-million from Citizens' reserves to help startup insurers, a move the governor has criticized. Lawmakers say the move will help reinvigorate the private market; and in a tight budget year, they had no other money to turn to.

Citizens Property Insurance Corp., which insures roughly one in three Florida homes, has been fighting the move.

"What may sound like a good idea is going to have extremely difficult and unintended consequences," said Bruce Douglas, Citizens board chairman.

Gov. Charlie Crist's office indicated Thursday that he will probably sign the bill. However, he has the ability to eliminate the loan program through his line-item veto power.

House Democrats said they supported the bill because of the extended rate freeze. The House approved the plan 117-0 Wednesday. The Senate vote Thursday was 33-5.

But Democrats criticized much of the bill, including a provision that allows Citizens to insure homes worth up to $2-million, saying it would add risk to the state-run insurer whose exposure is close to half-a-trillion dollars.

House insurance negotiator Dennis Ross, R-Lakeland, said he agreed in principle it was not the best idea, but it was a step toward making Citizens bulk up its reserves, because it brings in more premium dollars.

"This is akin to somebody who has been addicted to drugs and now must go through a methadone program," Ross said. "Is this the best thing to do in a vacuum? No … but in order to maintain a market, we've got to do this incrementally."

The insurance industry, whose lobbyists had taken over the Capitol rotunda this week, warned that the bill would further stymie the state's private insurance market.

"Consumers don't benefit when they have fewer insurance options," said State Farm lobbyist Mark Delegal. "We need long-term solutions that let insurance companies offer products at fair prices that insure the company can be there to pay claims when the storm hits."

The bill, however, does speed up the only remaining rate appeals process, infamous for taking a long time, even years.

And in another nod to the industry, the measure prevents regulators from denying rate hikes solely on whether an insurer purchases a certain set amount of reinsurance set at a fairly high-priced level.

The bill also reverses a ruling by regulators that prevented large property insurers like State Farm from offering their auto customers special "multiline" discounts even if their customers' homes are insured by Citizens.

. fast facts

Bill's highlights

• Freezes Citizens rates through Jan. 1, 2010.

• Doubles fines to $40,000 for insurers found to violate fair trade practices.

• Allows consumers to sue an insurer that doesn't pay the "undisputed part" of a claim within 90 days.

• Bans insurers through 2009 from charging a rate before approval by regulators.

• Requires insurers to give notice before dropping more than 10,000 policies in a year.

• Makes the state's actuaries' work open to public review.

• Borrows $250-million from Citizens to fund a low-interest loan program for startup insurers.

• Establishes a commission to study Citizens.

Legislators talk of insurance reform, deliver tweaks 05/01/08 [Last modified: Friday, May 2, 2008 9:56pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Tampa man driving ATV killed in Gibsonton crash on U.S. 41

    Public Safety

    GIBSONTON — A 24-year-old man driving an all-terrain vehicle died Monday afternoon in a crash on U.S. 41, the Florida Highway Patrol said.

  2. Questions about Russia chase Trump during first Israel visit


    JERUSALEM — President Donald Trump solemnly placed a note in the ancient stones of Jerusalem's Western Wall on Monday, sending a signal of solidarity to an ally he's pushing to work harder toward peace with the Palestinians. But his historic gesture- and his enthusiastic embrace of Israel's leader - were shadowed …

    President Donald Trump shakes hands with Israeli Prime Minister Benjamin Netanyahu after making joint statements, Monday in Jerusalem. [AP photo]
  3. Data breach exposes 469 Social Security numbers, thousands of concealed weapons holders


    Social Security numbers for up to 469 people and information about thousands of concealed weapons holders were exposed in a data breach at Florida the Department of Agriculture and Consumer Services. The breach, which the agency believes happened about two weeks ago, occurred in an online payments system, spokesperson …

    Commissioner of Agriculture Adam Putnam on Monday that nearly 500 people may have had their Social Security numbers obtained in a data breach in his office.
[Times file photo]

  4. Trigaux: Can Duke Energy Florida's new chief grow a business when customers use less power?


    Let's hope Harry Sideris has a bit of Harry Houdini in him.

    Duke Energy Florida president Harry Sideris laid out his prioriities for the power company ranging from improved customer service to the use of more large-scale solar farms to provide electricity. And he acknowledged a critical challenge: People are using less electricity these days. [SCOTT KEELER   |   Times]
  5. Editorial: Preserve wild Florida before it's too late


    The last dairy farm in Hillsborough County has milked its final cow, the pastures sold to developers who will build 1,000 new homes. The remnants of the last commercial citrus grove in Pinellas County, where the Sunshine State's famed industry began in the 19th century, were sold last year to make room for 136 homes. …

    As dairy farms and citrus groves disappear, much more needs to be done to avoid paving over Florida’s wild spaces.