Lawmakers want to do away with plan to grade insurance companies

Feb 24, 2011

The following article was published in The Florida Current on February 24, 2011:

Lawmakers want to do away with plan to grade insurance companies

By Kim MacQueen

A little-known statute in the state’s insurance codes mandates that the state’s Insurance Consumer Advocate issue report card-like grades to insurance companies every year to help citizens pick the best deal. But the office has never issued those grades — and under a bill that passed the House Insurance and Banking Committee on Thursday it never will.

HB 4115 by Rep. Scott Plakon, R-Longwood, deletes the provision, leaving all other duties of the advocate intact. Plakon said the statute is vague and ambiguous, and the office doesn’t have the data or the money necessary to issue such report cards anyway.

“The notion that the insurance consumer advocate, a government employee, would issue a report card to a private company — I personally find that troublesome,” Plakon said.

Rep. Evan Jenne took issue with repealing the provision, pointing out that it was instituted during the 2007 special session when U.S. Senator Marco Rubio controlled the Florida House. Other members also remembered the measure being part of a package of insurance reforms that were important to Rubio at the time. The report card was included in a major property insurance bill that also made changes to Citizens Property Insurance and increased the size of the state’s reinsurance fund.

“We all ran on how we were going to help the people of Florida. This was a part of that package,” Jenne said. “Please don’t go back and erode the man’s legacy.”

Rep. John Wood, R-Haines City, responded that “a lot of the legislation passed in that 2007 special session was ill-advised. This statutory scheme doesn’t work.”

“We are here to help the people of Florida keep down the cost of government, lower insurance premiums and save unnecessary expenses. I don’t think we’re demeaning the administration of Speaker Rubio … but we can also acknowledge that people can make mistakes, and fortunately, we have a system where we can correct them.”

The bill passed the committee on a 12-2 vote.

The push to repeal the report card is not just in Plakon’s bill. It is also included in two major comprehensive insurance bills — SB 408 and HB 803. Wood is the sponsor of HB 803.

Last year’s major property insurance bill — SB 2044 — also dealt with the report card. But that bill merely limited the criteria the consumer advocate could use before issuing the report card.

Sean Shaw, who was the insurance consumer advocate under Chief Financial Officer Alex Sink, said the report card was not implemented because the insurance industry wanted to “water down the grades” so they were meaningless. He said he was unable to get the report card in place before he resigned last fall to help Sink’s campaign for governor.