TALLAHASSEE — Open government advocates and a state senator who’s had her own problems obtaining public records are backing a sweeping bill making it easier for people to get government records.

The measure (SB 1598, HB 1211) is the product of Gov. Charlie Crist’s Commission on Open Government, which has spent three years coming up with the recommendations, and will be considered Tuesday by the Senate Community Affairs Committee.

If lawmakers approve the “Open Government Act,” it would rank among the state’s most significant public records reforms, said Florida First Amendment Foundation President Barbara Petersen, who chaired the panel.

 The bill would:

 •Require government officials to get training in open records and meetings.

•Bar agencies from charging for copies of records that take less than 30 minutes to duplicate.

•Prohibit agencies from charging for redaction of information that is personal in nature and exempt from public records laws and prohibit charging for any redaction fees of any records after Jan. 1, 2013.

•Require that all new exemptions be reviewed every 10 years after the initial five-year-review currently required by state law.

•Set uniform penalties, and attorneys’ fees, for public records violations.

•Give circuit judges jurisdiction to issue injunctions to enforce open records laws.

Sen. Paula Dockery, the bill’s sponsor who also sat on the panel, says she’s optimistic that lawmakers will heed the public’s demands for more transparency in government and approve the bill.

Dockery, who last year complained about the state Department of Transportation’s handling of her public records request for e-mails pertaining to a controversial Central Florida commuter rail project known as “SunRail,” said today, “In an election year, it would make good political sense that we start passing some bills that make the public happy. This bill would go a long way toward restoring public’s trust, but that may be wishful thinking on my part.”

In Dockery’s dispute with the transportation department, a few of the e-mails she eventually received had subject headings such as “Pancakes” and “French Toast,” spurring an investigation by Crist’s inspector general into whether the transportation secretary was trying to hide the purpose of the mail. The investigation found no wrongdoing by any DOT staff.

“Hopefully what we do will have a positive impact on all levels of government and their ability to provide in a timely fashion the records that are being requested and at a cost that’s not prohibitive,” said Dockery, a Lakeland Republican who is running in the GOP primary for governor against Attorney General Bill McCollum.

Several more small startup property insurers in Florida are headed for insolvency, leaving tens of thousands of homeowners looking for a new company as hurricane season approaches June 1.

Florida regulators are working quickly to mesh the troubled insurers with larger companies to soften the impact on home and business owners.

The Office of Insurance Regulation has been running audits in recent weeks on smaller insurers to be certain they could play claims if policyholders were hit with a destructive hurricane this summer.

The department’s solvency expert says the days are over when a company can get into the insurance business in Florida with just $5 million in capital.

Last Modified: Friday, March 5, 2010 at 5:52 p.m.

Florida homeowners have learned to live with the risk of hurricanes. They shouldn’t have to live with the risk that their property insurer won’t cover their losses if disaster strikes.

Yet, as detailed last Sunday in a Herald-Tribune investigative report by Paige St. John, numerous small, undercapitalized insurers operating in Florida are in perilous financial condition.

St. John’s report also depicted a state insurance regulatory apparatus that not only has permitted the heightened state of risk but encouraged suspect insurers to take on more homeowners policies than they could safely cover. The state even concealed some companies’ shaky status through the end of last year’s hurricane season.

The report makes clear that the Florida Legislature needs to step in to make sure that property insurers licensed to operate in this state have adequate means to cover the policies they are allowed to write.

Based on insurance industry standards used by regulators, industry insiders, academics and consumer watchdogs, St. John found that one in three privately insured Florida homeowners “relies on insurers that exhibit one or more signs of financial risk.”

Six property insurers in Florida have failed in the past year — more than in any other state. And state regulators openly admit that more will fail — leaving Florida taxpayers and consumers to pay the tab through assessments on homeowner, auto, boat and other insurance policies.

Hurricanes and fallout

This precarious position is largely a result of Florida’s recent history of hurricanes — and of the state government’s well-intentioned but ultimately flawed efforts to deal with the insurance industry fallout.

After 1992, when Hurricane Andrew devastated much of South Florida, and continuing through the multiple hurricane strikes in 2004 and 2005, major national insurers have dropped thousands of homeowners policies and largely withdrawn from the state.

The state government responded by creating its own insurer, Citizens Property Insurance, to cover homes considered too risky by private companies. The state also established the Florida Hurricane Catastrophe Fund to provide reinsurance — or backup funding — for insurers in the event a hurricane strikes.

But both government entities have become seriously underfunded, leading state officials to actively seek private insurers to assume more of the financial risk.

National property insurers, thwarted by state regulators in their pursuit of huge rate increases, have continued to pull out of the state. Into the breach have stepped small insurers that operate only in Florida.

“In 1992, these concentrated risk-takers insured just 6 percent of Florida,” St. John noted. “Today, including the Florida-only subsidiaries of national insurers, they cover 71 percent.”

How well they cover their many policy-holders is the question — and the Legislature needs to find the answer.

Last year, the Legislature tried to reverse the exodus of national insurers by passing a bill, co-sponsored by state Sen. Mike Bennett of Bradenton, that would have let them charge homeowners rates free from state regulation. The rates of small insurers would continue to be regulated.

Gov. Charlie Crist vetoed the legislation, contending that the smaller companies would be placed at a competitive disadvantage and that nothing would prevent the major providers from raising their rates and later leaving the state.

This year, Bennett has proposed a bill that would let all property insurers in the state charge whatever the market will allow.

Weaknesses need correction

In light of the risks posed by the current crop of small, undercapitalized insurers, Bennett’s bill deserves a fair hearing and, if approved by the Legislature, serious consideration by the governor.

But the Legislature should not stop there. Weaknesses in the state’s insurance regulatory system, exposed in the Herald-Tribune report, should be examined and corrected.

Among the issues worthy of scrutiny:

State law requires insurers to have a minimum of $4 million in reserve to pay future claims. Many industry insiders say the amount is insufficient, and some say Florida insurers should have $25 million or more. The state Office of Insurance Regulation uses $10 million as an unofficial benchmark, St. John reported. The Legislature should officially raise the minimum to $10 million or higher.

The state uses national standards to determine when insurers carry too much risk for their assets; companies falling below a “score” of 200 must file a remediation plan. The National Association of Insurance Commissioners is considering requiring insurers in high-risk areas — and Florida should qualify — to carry enough additional capital to achieve a score of 230. The Legislature should make 230 the minimum score.

Officials with the Office of Insurance Regulation, St. John noted, acknowledge that some Florida insurers “are on the verge of collapse,” but the OIR “will not name the companies or say how many are in trouble.” The OIR has placed weak companies under its supervision but, citing state insurance laws, concealed details from policyholders. The Legislature should re-examine the laws to see if the public would benefit from more transparency in the regulatory process.

One inevitable consequence of creating a more stable, reliable insurance market in Florida — whether by Bennett’s legislation or by setting high standards for all insurers — will be rate increases for policyholders.

But the rates — and the risk they cover — are part of the price of living in a state that is prone to hurricanes. It’s a price from which the state government — through its public insurance entities, its rate regulation and its encouragement of small, Florida-only insurers — has tried to shield residents.

We suspect that most Floridians would willingly pay a higher premium to have the security of knowing that, if disaster strikes, their home and possessions will be covered. After all, that’s why we have insurance.

The Florida Senate’s insurance committee narrowly struck down a proposal from Insurance Consumer Advocate Sean Shaw this week that would allow his office to participate in insurance rate hearings.

It would specifically give his office access to confidential documents involved in calculating rates so it can provide its own analysis and recommendations on behalf of consumers — much like the Office of Public Counsel does for utility rate hearings.

Sen. Mike Bennett, R-Bradenton, proposed adding the provision to a broad property insurance measure proposed by Sen. Garrett Richter, R-Naples, but withdrew saying legislators could discuss the idea later.

Sen. Mike Fasano, R-New Port Richey, proposed the provision instead. He said if lawmakers postpone the provision, they should delay the main bill too or approve the provision now because the committee can’t add it later if the bill is passed.

Sen. Ronda Storms, R-Brandon, agreed: “Now is the time to make sure this rides on the train.”

“You will find many areas of this bill that are anti-consumer and pro-insurance company,” Fasano said. “Could we not put something in there to protect the consumer…who is going to wind up paying those rates?

The panel struck down the idea by a 5 to 4 vote. Voting for it were Fasano, Storms, Joe Negron, R-Jupiter, and Alex Villalobos, R-Miami. Voting against it were Bennett, Richter, Chris Smith, D-Fort Lauderdale, Al Lawson, D-Tallahassee, and Jeremy Ring, D-Margate.

Storms successfully proposed removing a provision in Richter’s bill that would allow insurers to refuse replacement coverage for roofs older than 20 years. The bill was postponed because the committee did not finish debating Storms’ idea to remove a provision from Richter’s bill that would allow insurers to hold back part of a claim until the homeowner actually makes the repairs needed.

Representatives from the American Insurance Association and a lobbyist for several insurance companies said some homeowners file claims and instead of using all the money to make repairs, they pocket most of it.

Storms said she wants to help fight fraud but also wants to ensure consumers get paid for damages. “That’s what insurance is for,” she said. “I was an elected official in time of the hurricanes and I saw what people went through so that’s what I’m trying to address.”

by Joe Shea

Floridians are caught between the devil and the deep blue sea when it  comes to the insurance industry. While we have had aggressive regulation of pricing by the State Insurance Commissioner in the past  few years, we have had enormous insurance industry losses due to the  2004 hurricanes, with the result that a large number of healthy insurers have left the state’s homeowners without reliable coverage. Inevitably, smaller players less able to take their place and meet their obligations have prospered in the vacuum left behind.

That quandary was admirably pointed out in an investigative report that ran Sun., Feb. 28, on page 1 of the Sarasota Herald-Tribune. The  reporters found that at least 38,000 homeowners have policies with  companies the state and industry believe are going to fail soon, and at  least 100,000 homeowners have policies with companies that meet at  least one of three criteria for the likelihood of failure. There are companies out there with not so much as a Website, phone  number or contact name, doing business legally with a Florida license.  Dozens of companies – 48 have been identified – have little more than  the required $4 million reserve, and couldn’t even cover a house fire,  much less hurricane losses. Homeowners banking on them for coverage if  disaster strikes are going to be sorely disappointed.

Meanwhile, our Manatee County-based state legislators have been working  to remove any limits from what larger insurance companies can charge homeowners  for insurance. Last year, State Sen. Mike Bennett introduced such legislation, which Gov. Charlie Crist vetoed last year. This year, State Rep. Bill  Galvano, an attorney, has introduced the same proposal, and  Bennett is backing it in the State Senate. We may not know the outcome  of the legislation until sometime around midnight on the day the legislative session comes to a close, as hundreds of unread and ill-considered bills are rushed to the floor for last-minute passage  when, they hope, journalists are not watching.

You might well make the point that if insurance rates were not capped, the companies with no real reserves beyond the required $4 million could  attract larger premiums and perhaps set themselves on a sounder  footing. But wouldn’t it make a lot more sense to require insurance companies to have reserves that are a fixed percentage of their premium  liabilities? But what that would really do is bring the big companies  back to the table. On average. companies like Allstate have reserves of  about $4,000 per policy; the smaller firms have reserves on average of  about $750 for each home. The larger insurers would raise their rates -  also, admittedly, their certainty of covering losses – while the smaller  ones would either vanish or be devoured by the big fish. Their uncovered  losses would become the liability of the state’s insurance guaranty  fund, which may prove to be underfunded, too.

The entire insurance industry, however, is in crisis. Under pressure  for reform, the firms often try to exaggerate losses and demand inflated  premium increases, hoping they will get at least a portion of what they  ask for. As in the health care business, where insurers may be  charged $1,000 for a toothbrush, $53 for an alcohol wipe, $140 for a  single Tylenol and for 41 IV bags at $23 each when they only use one — as CNN just revealed. They are also taken advantage of by homeowners  who want more than they deserve for their losses. Some insurers, like State Farm, have just walked away from their homeowner business, preferring to  maintain automobile insurance  policies that are required by lenders and  the state. Here, drivers are a captive  audience, and the income is vast.

Because no hurricane has hit Manatee County since early in the last  century, the $15,000 a year my homeowner’s association pays for  insurance has been essentially wasted; had we started a self-insurance  program 10 years ago, the $150,000 we’d have piled up in reserves would  go a very long way to fixing any issues associated with hurricane damage  to our 32-unit building. Instead, we have thrown the money down on the altar of the great god Insurance, where it bursts into flame. In my estimate, however, the believers are diminishing in number and many are becoming skeptical of the value of their needless sacrifices.

BY STEVE BOUSQUET

Herald/Times Tallahassee Bureau

The mean season begins Tuesday when Florida lawmakers gather in Tallahassee for what will likely be a blistering two-month session. The Legislature is grappling with a deficit that could reach $3.2 billion. Leadership wants no new bills that would have a negative fiscal impact. There will be no additional revenues. It’s going to be ugly.

Our senators and representatives must forget about politics and make hard choices. Painful cuts are inevitable. But there are also some sensible ways to raise revenue.

Gov. Charlie Crist has been hammered hard for proposing a more optimistic budget, but he set a benchmark for the Legislature to meet. His budget anticipates $1 billion from the federal government to cover the increasing cost of Medicaid in Florida and projects a $2.6 billion shortfall. Lawmakers should recognize the likelihood of federal help.

But they also must know that cash gifts from the federal government come with strings attached. Sometimes federal largesse results in more expenses and bureaucracy. Each “opportunity” must be vetted.

Though there have been widespread cuts the last few years, there surely are additional ways to make government more efficient. Tampa’s Sen. Victor Crist points out, for example, that the state has no idea what office space is available for government agencies. Florida is paying rent on some privately owned properties when government offices sit empty, he says. An inventory is under way.

The veteran lawmaker is worried, however, that Florida residents don’t have a realistic understanding of what the state is facing. To close the deficit will require a 15 percent reduction in general revenue, most of which goes to health and human services and public safety. Cuts in these areas are inevitable.

Last year Florida depended on federal stimulus dollars, a cigarette tax and new fees to raise money, but smarter ways to raise revenue are essential. The state should join the national effort to collect legally owed sales taxes on products bought on the Internet from merchants in other states. They should be open to repealing some of the state’s sales tax exemptions.

Lawmakers should come to grips, finally, with the fact that gambling has arrived in Florida. Most of the state may not like it, but voters have allowed slot machines in a few counties, which allowed the Seminoles to offer the same games on their federally controlled land. Lawmakers should approve the governor’s agreement with the Seminoles, which would allow the state to share in their gambling profits but also prevent further spread of gambling in Florida.

Balancing the budget may be the Legislature’s single constitutional responsibility, but there are other issues Floridians care about, too.

Florida University Chancellor Frank Brogan has offered a challenging strategy to revitalize the economy. He wants the state to double its spending on higher education to $3.5 billion annually. He argues persuasively that a better-educated population will attract new enterprises.

Gov. Crist would take a step toward achieving Brogan’s vision by increasing the higher education budget by $100 million. He also promotes clean energy alternatives as a way to generate jobs. These are plans that make sense.

Lawmakers should understand that any effort to undermine growth controls in favor of development will likely ensure passage of Amendment 4, the controversial and ultimately chaotic Hometown Democracy amendment. It would change the state constitution to require a voter referendum on every city and county comprehensive plan amendment or development order and bring growth, and potentially the economy, to a standstill.

The amendment resulted from frustration that the public had no say in the development process. The Florida League of Cities is promoting legislation to set a statutory minimum requiring “the opportunity to engage.” It’s a proposal that would send a message that the Legislature understands the system is broken. It needs a sponsor.

Gov. Crist and the legislative leadership also want to loosen the costly handcuffs of Florida’s class-size law. The move would save the state more than $3 billion next year.

Lawmakers should not spend a minute on proposals to drill in state waters immediately off the coast, which would be an outrage.

There are other issues – property taxes, homeowner’s insurance, the environment – all of which ultimately affect the taxpayers of Florida.

By setting priorities, making strategic cuts and showing fiscal restraint, the Legislature can prove its conservative bonafides while protecting our vital interests.

THE ISSUE: Legislature convenes.

The Florida Legislature again faces its annual 60 days of dealmaking. Somehow, lawmakers must balance a new state budget and provide a modicum of state government services.

It’s a pretty tall order. The state is short of money, with lawmakers looking at a budget gap of more than $3 billion in the proposed budget that takes effect July 1. Complicating matters is that 2010 is an election year, and with so many lawmakers either seeking higher office or re-election, Floridians will be lucky to see any major, bold initiatives coming out of this session.

Unfortunately, Florida’s pressing problems demand lawmakers take decisive action now.

Lawmakers should move beyond ideological talking points and focus on the best ideas to balance cost savings and spending cuts with targeted initiatives to raise revenue. As most lawmakers now know, and the public is beginning to understand, there aren’t any simple solutions to the complicated process of running the nation’s fourth largest state.

For example, legislative efforts to spur economic growth will cost taxpayers money. Still, depending on how tax breaks and spending initiatives are targeted, the resulting new revenue could materialize without significant backlash. Gambling, for example, is a potential money maker for the state, and in parts of South Florida, paramutuels offer gambling activities but labor under a 50 percent tax rate on slots receipts. A reduction is in order.

Medicaid is another program in which lawmakers need to use the best established practices to minimize cuts and provide quality service. Turning it over to HMOs may save money, but the idea that private insurers can run the health-care program for the poor, elderly and disabled any more efficiently and effectively isn’t a given.

This should also be the year lawmakers retrieve a bit of their collective spines. Now is not the time to backpedal on fee increases on driver’s licenses and tag renewals.

Despite the budgetary shortfalls facing Tallahassee, lawmakers will seek ways to save taxpayers money. While that’s important, the Legislature shouldn’t forget that their constituents want them to address and solve problems, too.

BOTTOM LINE:

Bold steps needed to resolve enduring problems.

Copyright © 2010, South Florida Sun-Sentinel

By Paige St. John