Property insurance bills suffer setbacks in Senate

Feb 28, 2012

The following article was published in The Florida Current on February 28, 2012:

Property Insurance bills suffer setbacks in Senate

By Gray Rohrer

Legislation to allow unregulated, out-of-state property insurance companies known as surplus lines carriers to take over policies of state-backed Citizens Property Insurance Corp. appears to have hit a wall in the Senate after SB 578 was postponed on the Senate floor Tuesday.

The measure would allow surplus lines companies to take over Citizens’ policies as long as the insurers have $50 million in surplus and an A- rating or better from the A.M. Best rating agency.

Sen. Mike Fasano, R-New Port Richey, and other senators are prepared to fight the bill, offering amendments to allow Citizens customers the option of signing on to a surplus lines carrier, as opposed to only having the option of opting-out of the company after their policy is taken over, as in the current bill. Other amendments would put surplus lines companies under the Florida Insurance Guaranty Association, which pays out claims if a company goes bankrupt.

The House version, HB 245, already passed through the House, but after meeting fierce resistance in the Senate, those behind the move to reduce the 1.47 million policies in Citizens are looking to insert the bill into different legislation. Rep. Mike Horner, R-Kissimmee, filed an amendment to his omnibus insurance bill, HB 1101, to place the surplus lines measure into the bill, but withdrew the amendment on the House floor Tuesday.

Fasano said that is the wrong approach to take.

“I would not recommend that they do that because all of the other good provisions in that bill may die. Rep. Horner can do what he wants, and the House of course will make that decision. But I’ve learned in my 18 years, never put too much on a piece of legislation, especially additions that are controversial,” Fasano said before the amendment was withdrawn.

Meanwhile, a separate bill to shrink the size of the Florida Hurricane Catastrophe Fund, or Cat Fund, fell victim to scheduling Tuesday in the Senate Budget Subcommittee on General Government Appropriations. The panel postponed the vote on SB 1372 after Sen. Jack Latvala, R-St. Petersburg, urged committee chairman Sen. Alan Hays, R-Umatilla, to take up noncontroversial bills instead, in order to get through the 37 bills on the committee’s agenda.

“I don’t know why we’d be hearing the bill if the House companion has not moved,” Latvala said.

The House version of the bill, HB 833, hasn’t come up for a committee vote in that chamber. The bill would shrink the coverage of the Cat Fund, which acts as state-backed reinsurance for Citizens and private insurers, from $17 million to $12 million over five years. It also increases co-pays for insurers, which would likely be passed on to policyholders.

Find this article here: