Are Florida’s home insurers in good hands at Capitol?
Julie Patel | (Fort Lauderdale) Sun Sentinel
April 13, 2009
The main property-insurance legislation gaining momentum this year in Tallahassee is a departure from laws passed in 2007 and 2008 that aimed to lower homeowner-insurance premiums and beef up the state’s authority to hold insurers accountable.
And most of the bills this year are supported by insurance groups.
Of the 36 homeowner-insurance bills proposed by the Legislature, half would benefit insurers — a dozen of which already have passed at least one legislative committee. Four of the 18 that don’t benefit insurers also have traction.
For instance, legislation proposed by Sen. Bryan Nelson, R- Apopka, that passed the House insurance committee this month would, among other things:
•Allow private insurers to automatically increase premiums by up to 10 percent a year with minimal state scrutiny.
•Prevent regulators from limiting how much insurers spend on advertising costs or insurance-agent commissions.
•Allow insurers to require public adjusters hired by policyholders to represent them in claims disputes to take sworn statements under oath.
Nelson said his bill includes items needed to draw insurers to the state and reduce taxpayers’ risk if a major hurricane strikes. All home and automobile policyholders in Florida pay fees to offset deficits in state insurance entities, such as Citizens.
"We understand the times are tough, and we don’t want to place an undue burden on our constituents, but we gotta have actuarially sound rates," said Nelson, an insurance agent.
Do donors surpass constituents?
Thirteen of the two dozen Florida lawmakers proposing property-insurance bills during the 60-day legislative session that ends May 1 are pitching measures that benefit insurance companies. Nelson tops the list of the two dozen legislators in insurance-related campaign contributions with $29,295.
The question is "would actions such as introducing a bill, or speaking out in committee on behalf of a big donor, have been taken in the absence of a contribution?" Beth Rosenson, an assistant political-science professor at the University of Florida, wrote in an e-mail.
Nelson said he doesn’t pay attention to how much money he receives from insurance companies.
"I’m a private-market-sector guy," Nelson said. "I’ve got no idea how much money I have from insurance companies. But I always look at small business as my ally."
Will raising rates get easier?
The Senate insurance committee gave a green light last Monday to its main insurance bill, sponsored by its chair, Sen. Garrett Richter, R-Naples.
Richter’s bill includes a provision to increase Citizens’ rates by no more than 10 percent a year for individual policyholders. But the Senate committee deleted an automatic-rate-increase provision after fierce opposition from Senate President Pro Tempore Mike Fasano, R-New Port Richey.
House and Senate insurance committees also passed a measure that would allow large property insurers to offer policies that are exempt from most pricing regulation. People who pick the less-regulated policies will be expected to pay higher premiums but would be exempt from paying annual fees to offset Citizens’ deficits.
Rep. Bill Proctor, R-St. Augustine, said he proposed the House version of the bill to address concerns about major insurers scaling back or leaving Florida. State Farm Florida, the state’s largest property insurer, announced Jan. 27 that it’s leaving Florida within two years.
With about three weeks left in the legislative session, Florida residents and their advocates can still weigh in. Bills must be approved by the full House and Senate before Gov. Charlie Crist considers signing them into law.
"I’m a free-market guy, but I think we need to keep our eye on insurance companies, property-insurance companies specifically," Crist told reporters last week when asked about insurance-rate increases. "They have a history of not being the kindest, warmest industry to the people of Florida."
Josh Hafenbrack of the ( Fort Lauderdale) Sun Sentinel contributed to this report.