Senator Fasano starts up veto campaign against insurance bill
May 12, 2011
The following article was published in the Florida Current on May 12, 2011:
Senator Fasano starts up veo campaign against insurance bill
By Gary Fineout
A sweeping property insurance bill landed on the desk of Gov. Rick Scott this week.
And it took little time for those opposed to the bill — SB 408 — to make a longshot pitch to the governor that he veto the legislation.
Sen. Mike Fasano, R-New Port Richey and an ardent critic of private insurers, on Thursday called on his constituents to contact Scott’s office in opposition to the bill. Scott has until May 26 to act on it.
Those backing the bill contend it will help the state’s volatile insurance market by making it easier for insurers to raise rates to cover reinsurance costs, while also placing limits on sinkhole coverage and limiting the time that homeowners can file claims for both sinkholes and hurricanes. Homeowners would have just two years for sinkhole claims and three years for windstorm claims.
Fasano asserts that the legislation contains a “backdoor tax and fee increase that will hurt most homeowners, consumers and small business owners at a time with very high foreclosure and unemployment rates, and a fragile economic recovery underway.” Fasano is referring to the fact that the legislation allows insurers to raise rates by 15 percent in order to cover costs such as reinsurance, which is backup coverage for insurers that itself is not regulated.
The senator is also critical of the time limits on filing claims, as well as a provision in the bill that allows insurers to turn in supplemental information to state regulators without having to get it certified by top officials in insurance companies.
“I don’t know about you but I want to see insurance companies raise their right hand and swear to tell the truth before I’ll believe their claims,” Fasano stated.
SB 408 was the only major property insurance bill passed during the 2011 session. Other measures dealing with Citizens Property Insurance Corp. floundered and did not pass.
Those backing the legislation anticipate that Scott will sign the bill into law. Former Gov. Charlie Crist vetoed property insurance measures in both 2009 and 2010. Scott on the campaign trail said he wanted to fix Citizens and has generally been more supportive of making changes to help the state’s property insurance market.
Don Brown, a former lawmaker who now lobbies for the insurance industry including reinsurers, sent out a response to Fasano where he contended that the senator “does not have a working knowledge” of how the legislation would function. Brown contends that the bill just allows for rate hikes tied to reinsurance to get reviewed faster by state regulators. Brown also cited an oft-quoted industry talking point that the change in how homeowners are compensated for repairs mirrors the way it works in other states
“After all his public service regarding insurance matters, it is embarrassing to see Sen. Fasano lose his expert credibility by displaying such a poor understanding of the property insurance package passed by his colleagues,” Brown wrote.
Those who support SB 408 — which includes Insurance Commissioner Kevin McCarty — say the bill is needed to remove some of the “cost drivers” affecting insurers, despite the fact that a hurricane has not hit the state in five years.
Fasano takes a different position, arguing that changes that lawmakers made in 2007 to make Citizens more competitive and expand the state-backed reinsurance fund have helped consumers.Some provisions in would be changed by SB 408.
“The fact is the current law, passed just four years ago, has provided accountability of the insurance industry,” Fasano said. “It has kept rates affordable and ensured that insurance company financial information is truthful and complete allows consumers to determine that premium rate increases are justified.”
Tags: Citizens Property Insurance, Insurance Rates, Property Insurance, Sinkholes