‘Surplus lines’ insurance bill sits in state Senate
Feb 28, 2012
The following article was published in the Palm Beach Post on February 28, 2012:
‘Surplus lines’ insurance bill sits in state Senate
By Charles Elmore
A bill to move Citizens insurance customers to “surplus lines” carriers who can raise rates at will is in a holding pattern in the state Senate, but homeowner advocates warned of efforts to attach it in “stealth” fashion to other bills.
“The Florida Senate is refusing to pass blatantly anti-consumer legislation, which is why the insurance industry is now trying to bury it in must-pass legislation,” said Sean Shaw, founder of the advocacy group Policyholders of Florida.
The House passed a bill (HB 245), whose Senate companion (SB 578), has been treading water ahead of a full chamber vote. But Shaw’s group warned of efforts to slip “surplus lines” provisions into other bills such as HB 1101, which among other things exempts salvage car dealers from having to carry certain types of insurance.
One part of HB 1101, for example, expands the number of ratings agencies that can qualify surplus lines insurers for purposes of taking over Citizens customers.
A lobbyist for one surplus line company, GeoVera, said he has confidence in the original bill.
“I have faith that the Senate is going to enact SB 578/HB 245, and reduce Citizens and Cat Fund taxes on all Floridians,” lobbyist and attorney Tim Meenan said.
Supporters of the plan say homeowners will have a choice to stay with Citizens, and the program could help shrink the state’s insurer of last resort with 1.5 million customers. That reduces the risk of future assessments to ratepayers or taxpayers if a big storm exhausts reserves at Citizens and a state fund that backs it up, they say.
Consumer advocates call it a “vulture” bill that automatically enrolls customers chosen by out-of-state carriers unless they take steps to stay with Citizens. It leaves homeowners insured by companies that can raise rates as much as they like and are not part of a state safety net to pay claims if the insurer folds.
On Monday, the Senate did not take up any legislation but devoted the entire session to farewell speeches.
On Tuesday, the surplus lines measure was postponed again. But Senate President Mike Haridopolos, R-Merritt Island, said the chamber would get to it as early as this week.
“We’re taking that up. It’s an issue of course we’re going to take on. We have plenty of time in the next few days,” Haridopolos said.
Find this article here: http://www.palmbeachpost.com/storm/surplus-lines-insurance-bill-sits-in-state-senate-2205650.html