Senate Banking and Insurance Committee Debates Major Property Insurance Bill Today, January 25, 2011

Jan 25, 2011


The entirety of the Florida Senate Committee on Banking and Insurance (“Committee”) meeting today, January 25, 2011, was devoted to SB 408, the comprehensive property insurance bill sponsored by Committee Chairman Garrett Richter.

Chairman Richter opened the meeting by offering a series of amendments to his bill, all of which passed. While discussing these amendments, Senator J.D. Alexander indicated that he believed the Office of the Florida Insurance Consumer Advocate and the Florida Office of Insurance Regulation have watched over a minority of policyholders and artificially suppressed homeowners insurance rates to the detriment of the majority of Florida policyholders.

Senator Ellyn Bogdanoff stated that Florida has over-regulated the insurance industry, which has led to inflated premiums.

In debate, Senator Mike Fasano showed skepticism for free market solutions for the insurance industry because “it has been tried and failed.”

Committee Vice Chair Chris Smith and Senator Fasano also offered amendments, both of which were considered “unfriendly” by Chairman Richter.  

Twenty-eight amendments were filed to SB 408, five of which were filed today by Senator Fasano.  

To view the complete text of SB 408, click here.

After consideration of several of the amendments, on a motion by Senator Mike Bennett to temporarily postpone action the bill due to the large number of amendments and limited time in which to consider them, Chairman Richter decided to take up the bill and amendments at the next Committee meeting, which has not yet been scheduled. 

The meeting is expected to be scheduled during the week of February 7-11, 2011.

Following is a listing of amendments and Committee actions on each:

FAILED–Committee Amendment 131262  by Senator Fasano would establish experience criteria for sinkhole neutral evaluators.  According to Senator Richter, would discourage evaluations.

  • PASSED-Amendment 531380 to Amendment 131262 relates to neutral evaluators

CONSIDERED, BUT LEFT PENDING DUE TO TIME–Committee Amendment 160462 by Senator Fasano specifies what constitutes a change in policy terms and clarifies the definitions of “policy” and “renewal.”  Insurers would be required to give notice of policy changes by certified mail. Chairman Richter indicated he felt this would cause policyholder confusion.

NOT CONSIDERED–Committee Amendment 245588 by Senator Fasano would make a third-degree felony the failure of a seller of real property to make certain disclosures and provide a buyer with a copy of any inspection reports and certifications.

PASSED–Committee Amendment 249528 by Senator Garrett Richter relates to actual and replacement cost value payments on dwelling and personal property claims.   Would limit initial claims payment to actual cash value and amend as receipts are received from the policyholder.

NOT CONSIDERED–Committee Amendment 284748 by Senator Fasano defines “structural damage” as it relates to sinkhole loss.  It further describes specific cosmetic damage that is not covered unless it is accompanied by structural damage. 

PASSED–Committee Amendment 338208 by Senator Richter relates to the burden of proof in sinkhole claims.  It also revises the reports that an insurer must file with the applicable clerk of the court and requires the policyholder to file certain reports as a precondition of payment acceptance. 

NOT CONSIDERED–Committee Amendment 353588 by Senator Fasano relates to sinkhole claim certifications.  It requires the professional engineer responsible for monitoring sinkhole repairs to issue a report and certification to the property owner, as well as file such a report with the court.

PASSED–Committee Amendment 388934 by Senator Richter revises the definition of “losses” relating to the Florida Hurricane Catastrophe Fund to exclude certain losses and provide applicability.

PASSED–Committee Amendment 440210 by Senator Richter repeals the requirement that the Florida Insurance Consumer Advocate prepare an annual report card for each personal residential property insurer for Florida’s Chief Financial Officer.   During discussion on this amendment, Senator Richter compared the idea of an insurer report card to ”  . . . a screen door on a submarine.”

NOT CONSIDERED–Committee Amendment 454164 by Senator Fasano requires the certification of public adjusters who adjust sinkhole damage.  Exemptions could be granted for certain experience.  The amendment would also require the Florida Department of Financial Services (“DFS”) to adopt advertising standards by rule and review proposed advertisements by certified adjusters.  The DFS would also be able to charge a fee for such a review.

NOT CONSIDERED–Committee Amendment 458400 by Senator Fasano relates to the establishment of a sinkhole database and creates a new section of Florida law that would mandate counties to adopt an ordinance requiring permits before conducting an investigation of potential sinkhole activity, as well as before making any repairs resulting from sinkhole activity.  A summary of the investigation and repairs would be required, as well a copy of the permit and summary to be filed in the county records.

PASSED–Committee Amendment 536106 by Senator Richter contains conforming renewal language relating to sinkhole coverage so that insurers are not required to offer sinkhole coverage. Senator Fasano was vocal in his opposition to this amendment.

NOT CONSIDERED–Committee Amendment 542594 by Senator Richter would increase insurer surplus requirements in HB 408 from $5 to $15 million.  It also fixes a typographical error.                

NOT CONSIDERED–Committee Amendment 564896 by Senator Fasano relates to insurer takeouts of non-renewed policies from Citizens.

NOT CONSIDERED–Committee Amendment 599640 by Senator Fasano would authorize a policyholder to retain a professional engineer or geologist at the policyholder’s expense to conduct testing or dispute sinkhole-related findings.  It also would require all sinkhole-related repairs to be completed within a certain time with certain exceptions and provide for  a criminal penalty for offering a rebate or for accepting a rebate from persons performing such repairs.  Senator Fasano’s amendment also revises provisions relating to sinkhole-related inspection reports. 

PASSED–Committee Amendment 642410 by Senator Richter relates to the qualifications of professional engineers and geologists in the evaluation of sinkhole activity.                    

PASSED–Committee Amendment  650902 by Senator Richter defines “policy” as it relates to personal lines property and casualty insurance.

NOT CONSIDERED–Committee Amendment 743056 by Senator Fasano requires authorized Florida property insurers to provide catastrophic ground cover collapse.                         

PASSED–Committee Amendment 775666 by Senator Richter provides for sinkhole-related reimbursement only if a policyholder requested testing and reporting pursuant to ss.627.7072 and 627.7073, F.S. 

PASSED–Committee Amendment 785390 by Senator Richter is a technical amendment relating to recommendations set forth in an insurer’s report issued pursuant to s. 627.7073, F.S.   

PASSED–Committee Amendment 912394 by Senator Richter revises Citizens’ requirements for providing an insured with notice of nonrenewal, cancellation or termination of personal lines or commercial residential property insurance  from 180 days to 90 days in all situations.  Senator Fasano expressed concern about this amendment, inasmuch as so many insurers are non-renewing policies. 

FAILED–Committee Amendment 925914 by Senator Chris Smith would insert specific language within SB 408 relating to legislative intent in regard to sinkhole insurance coverage.  It would also ensure that SB 408’s changes would not take effect until July 1, 2011, so that existing policies would operate under law prior to the passage of this bill.  Senator Richter spoke in opposition to Senator Smith’s amendment, with the debate centering around procedural rights versus substantive rights.  According to Senator Richter, this amendment would impact procedural rights and impair the sinkhole fixes. 

PASSED–Committee Amendment 973566 by Senator Richter would void coverage in the event that a policyholder receives a contractor rebate from sinkhole-related repairs.       

PASSED–Committee Amendment 642410 by Senator Richter would change the description of geologist and engineer qualifications.

NOT CONSIDERED–Committee Amendment 276990 by Senator Fasano

NOT CONSIDERED–Amendment 416878  to Amendment 454164 by Senator Fasano, which would preclude licensed public adjusters from adjusting catastrophic ground cover collapse claims under certain circumstances.

NOT CONSIDERED–Amendment 663802 to Amendment 454164 by Senator Fasano, which relates to a sinkhole education program to be established.

Senator Richter closed the meeting by commending Committee Staff Member Kathy Emerich, who is retiring in February.  He related that Ms. Emerich was instrumental in the creation of the recently issued Senate Sinkhole Report.


To view a complete listing of all filed amendments and today’s respective Committee actions on the amendments, click here.