Property insurance reform dodges last-minute amendments to pass Senate

May 6, 2011

The following article was published in the Naples Daily News on May 5, 2011:

Property insurance reform dodges last-minute amendments to pass Senate

By Ryan Mills

With his property insurance reform bill strapped to his back, Sen. Garrett Richter successfully maneuvered through a minefield of last-minute amendments designed to derail the controversial legislation Thursday night.

With the clock ticking on the state Legislature’s 2011 session, which ends Friday, the Naples Republican informed his colleagues that any successful amendments would essentially kill his signature bill. There would likely not be time for the Florida House to pick it back up again, he said.

But when the smoke cleared around 7:30 p.m., the amendments – more than 20 of them – were either defeated or withdrawn. The bill eventually passed on a 26-11 vote. It now heads off to a.inline_topic:hover { background-color: rgb(234, 234, 234); } Gov. Rick Scott’s desk.

“This is a good bill for the policy holders of Florida,” Richter said. “With this bill, we can responsibly reduce premiums, we can responsibly increase competition, and we can responsibly reduce fraud in the insurance industry.”

The omnibus Senate Bill 408 is designed to address industry cost drivers and improve the health of the state’s insurance market. Richter has said all along his desire is to create an environment where property insurance companies can compete and thrive, and pay claims if a major hurricane hits Florida.

Among its many provisions, the bill would increase minimum surplus – cash-on-hand – requirements for insurance companies, narrow the window in which most claims can be brought from five years to two or three, give consumers options between replacement cost and actual cost insurance, and increase regulations on public adjusters who have been accused of ginning up specious sinkhole claims.

However, before passing the bill Wednesday, the House “diluted it a bit,” Richter said.

Most notably, the House removed language that would have allowed insurance companies to stop offering coverage for sinkhole claims, which have been rising dramatically over the last few years. Richter believes much of the increase can be attributed to fraud.

As it is now, the bill continues the current mandate that companies offer sinkhole coverage.

“The bill is still a good bill,” Richter said. “Needless to say, the bill I ultimately really wanted was the bill we sent to the House.”

Richter’s foil on Thursday – and throughout the process – was Sen. Mike Fasano, a New Port Richey Republican who previously called the bill the most anti-consumer piece of legislation he’d ever seen. He conceded that, from his perspective, some of the recent changes improved the bill, but he continued to fight it until the end.

Fasano believes the bill will ultimately lead to increase premiums and weakened consumer protections.

“It’s going to hurt every homeowner, every condo owner, every manufactured mobile home owner, every business owner in the state, because rates are going to go up,” he said after the final vote.

Fasano introduced more than a dozen amendments to the bill, in hopes that one would stick and, for all intents and purposes, kill it.

His primary amendment would have removed a provision of the bill that allows the cap on premium increases to rise from 10 percent to 15 percent for re-insurance financing costs.

“If this bill passes without this amendment, your constituents back home will see a 15 percent rate increase above and beyond what their insurance company has already been granted,” Fasano said.

Richter denied that was true. The Florida Office of Insurance Regulation has the final say on all rate increases, he said.

“There is no automatic increase. Not here, not anywhere,” Richter said.

The Senate rejected Fasano’s amendment on a thin margin — 18 yeas, 20 nays. After that defeat, he withdrew his remaining amendments; they were even less likely to pass, he admitted.

“Why waste the Senate’s time when there are other bills that need to be brought up,” Fasano said.

Richter has carried property insurance reform bills for the last few years. He called it “amends” for a bad property insurance vote he made his first year in Tallahassee that froze the prices of the state-run Citizens Property Insurance Corp.

The Legislature passed a bill similar to SB 408 last year, but then-Gov. Charlie Crist vetoed it out of concern that it could have lead to premium increases.

When asked if he was confident Scott would sign this year’s bill, Richter said, “I feel more confident the governor will sign it this year than last year.”

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