Revamped Insurance Package Passed by House

May 2, 2008

Private property insurers could soon be more tightly regulated under a voluminous measure passed in the Florida House.

The 120-page bill provides incentives to attract new companies to enter the state’s lucrative, albeit risky, marketplace. That would reduce the state’s liability at the same time.

The proposal still needs to go back to the Senate, which has passed a version of the bill that is far tougher on private insurance companies.

Among the provisions in the House bill (SB 2860):

_ Preventing for another year companies from raising rates while awaiting state approval for the increase.

_ Extending a rate freeze for hundreds of thousands of Citizens Insurance policy holders for another year.

_ Requiring private companies to take a certain amount of their new business from the state-backed Citizens. Those commercial insurers wanting to dump more than 10,000 policies in a year’s period would have to first notify state regulators of their intention 90 days beforehand.

_ Requiring insurers to pay undisputed claims within 90 days and subjecting them to substantially increased fines for violating the insurance code or any lawful rule or order.

_ Asking the Office of Insurance Regulation to establish a transparent ratemaking policy.

_ Making homes appraised at $2 million or more ineligible for Citizens’ coverage.

The legislation was a compromise, and Sen. Steve Geller, D-Cooper City, called the deal “half a loaf” but an acceptable middle ground. Geller chaired a Senate select committee that grilled insurance executives during a series of hearings leading into the session.

Legislators expanded its Hurricane Catastrophe Fund to $28 billion last year with the overall intention of lowering premiums for consumers.

But fewer than one in five Floridians have seen lower rates, infuriating many lawmakers and Gov. Charlie Crist, who made lower taxes and lower insurance rates the centerpiece of his successful 2006 campaign.

Since lawmakers passed the bill last year with the goal of lowering rates, the Office of Insurance Regulation has denied dozens of requests by private companies for rate increases.

Was this article valuable?

Here are more articles you may enjoy.