Bill to reduce hurricane assessments breezes through Senate panel

Jan 19, 2012

The following article was published in The Florida Current on January 18, 2012:

Bill to reduce hurricane assessments breezes through Senate panel

By Gray Rohrer

Legislation that would all but eliminate regular assessments on homeowners’ policies in the aftermath of a catastrophic storm easily moved through the Senate Banking and Insurance Committee Thursday, passing with a unanimous vote.

After a damaging hurricane, customers of state-backed Citizens Property Insurance receive assessments on their premiums to recoup losses. If the damage exhausts that 15 percent assessment, 6 percent regular assessments are placed on the policies of non-Citizens customers. If more money is needed, emergency assessments are placed on Citizens and non-Citizens policyholders.

SB 1346 would eliminate the regular assessments for personal lines and commercial lines accounts, and reduce the regular assessment for coastal accounts from 6 percent to 2 percent. Instead, the money would be recouped from the emergency assessments, which can be gathered by private insurance companies over a longer period of time than regular assessments, which must be collected within 90 days.

Former Rep. Don Brown, a senior fellow with the Heartland Institute, a free-market think tank supporting the bill, said that after six straight years without a major hurricane, Citizens’ $6 billion surplus means it doesn’t need to recover capital as quickly after a storm.

“It’s just simply not necessary anymore,” Brown said.

The House Insurance and Banking Subcommittee discussed the companion bill, HB 1127, on Tuesday, but is yet to vote on the bill. It is scheduled for three committee stops in the House, but has just one more in the Senate before heading to the floor.

Find this article here: