News & Updates


Legislation could mean big changes to insurance in Florida

Proposals would allow private firms and state-run Citizens Property Insurance Corp. to raise rates

May 17, 2009 – 5:08 PM
Thomas J. Monigan
Daily News

Maybe Don Brown’s hollering in the wilderness was heard in Tallahassee after all. 

Two bills recently passed by the Florida Legislature that could have a both immediate and future impact on the state’s approach to property insurance are headed to Gov. Charlie Crist’s desk for his signature.

Respectively, they are the Consumer Choice Bill (HB 1171) and an Omnibus Bill (HB 1495).

The Consumer Choice Bill would allow some companies to charge rates that are not approved by the Office of Insurance Regulation. But that depends on a number of qualifying factors.

Supporters say it would attract insurers with more capital and the ability to pay claims after major storms
Among other things, HB 1495 would allow Citizens Property Insurance Corp. to raise its rates up to 10 percent per policy starting in 2010.

Citizens is the state-run, last-resort insurer which has become Florida’s largest homeowner’s carrier.

Sterling Ivey in Crist’s press office sent the following e-mail on what the governor might do:

"In regards to HB 1171, the governor said … that this bill ‘gives me some pause,’ and he looks forward to reviewing the final bill when it reaches his desk. He has not said that he will not sign or veto the bill until he has the opportunity to review all of the bill’s provisions.

"In terms of HB 1495, the governor said earlier this week in response to the increased rates, ‘That’s probably appropriate. I would rather not have rate increases. Who wouldn’t? But I want to make sure the company stays solvent and secure.’ "

State Sen. Don Gaetz voted in favor of both bills.

"Hopefully, this begins the process of getting the state government out of the insurance business," Gaetz said. "My perfect world is one in which affordable insurance would be available to everyone."

As far as HP 1495, an annual rate increase of as much as 10 percent per policy won’t necessarily get Citizens to a sound level anytime soon. An analysis quoted on the Insurance News Net Web site has shown Citizens would need anywhere from a 40-percent to a 55-percent rate increase, depending on the policy, if the state insurer was to become sound.

Insurance News Net also reports that HB 1495 also proposes eventually to remove the Temporary Increase in Coverage Layer, known as the TICL, from the Florida Hurricane Catastrophe Fund at a rate of about $2 billion over six years.

The Legislature increased the fund’s exposure several years ago and required insurers to purchase reinsurance from it. But the additional layer was never properly funded and, until recently, the Catastrophe Fund carried a potential $19 billion shortfall if a large hurricane hit because it was not capable of selling bonds to cover claims.

In recent months, former state Rep. Brown has been traveling the state to present "Florida’s Impending Storm – The Insurance Solvency Crisis," complete with terrifying details.

For one thing, he claims that if a major hurricane hits, the Florida Hurricane Catastrophe Fund could fall $10 million to $18 billion short on being able to pay claims to people holding policies from Citizens.

In addition, Brown contends if the "CAT Fund" runs dry, policy holders from other companies could face huge "assessments" in order to fill the void, regardless of whether they’ve ever had a problem or not.

Brown’s former colleagues virtually ran him out of the Legislature after he opposed Crist’s sweeping property insurance changes.

He was one of only two House members in 2007 to vote against the legislation that more than doubled the risk assumed by consumers regarding catastrophic storm losses.

Brown, of DeFuniak Springs, didn’t talk about that very much during his recent presentation at the Emerald Coast Conference Center.

"Don Brown’s view was in the minority," Gaetz said recently, "but in the last five years some, maybe much, of what Don brown said had some validity."

Brown’s summary on the two bills was: "Taken in combination, they are a start in the right direction. They will certainly not address the immediate concern that if we have major storms it would be too little, too late."

Local State Farm agent Larry Patrick said he doesn’t think the Omnibus Bill "may not be enough, soon enough."
But overall, Patrick said the Customer Choice bill "moves us toward a free market system, rather than a socialistic system."

Go to and send an e-mail to Gov. Charlie Crist.