Fla. sponsor of property insurance reform measure pulls bill after unfriendly amendments
Associated Press Writer
8:07 a.m. EDT, April 23, 2010
TALLAHASSEE, Fla. (AP) — Property insurance reform has eluded state lawmakers for several years, and it seems as if it could slip out of their grasp this year as well.
With a week to go in the 2010 legislative session, the Republican-led Legislature appears to have given up on achieving rate deregulation for private insurers and a major reform proposal (SB 2044) hit a snag Thursday during Senate debate.
It was disagreement among several Republicans that at least temporarily derailed this year’s key property insurance reform bill.
An amendment that would have required insurers to pay replacement claims in full without proof of purchase forced Sen. Garrett Richter, R-Naples, to withdraw his bill (SB 2044). Two amendments by Sen. Ronda Storms, R-Valrico prevailed Thursday over protests by senators who argued that current law permits excessive fraud because policyholders are not required to produce receipts on purchases before being reimbursed in full.
“I don’t think they’re good amendments given the goal of the bill … to reduce the cost of insurance for consumers and at the same time strengthen the industry for solvency,” said Richter, a Naples banker.
“Fraud increases costs … in everything,” Richter argued during floor debate. “If you want to reduce premiums for our consumers, one of the ways we can do it responsibly is to eliminate fraud.”
A similar measure (HB 447) in the House is also stalled.
Richter postponed debate and plans to try again on Friday.
“A number of the members don’t understand that total replacement cost is paid,” Richter said. “I think there was a fever of anti-insurance company.”
Although no major storms have hit Florida since the devastating years of 2004 and 2005, when eight struck, many insurance companies doing business in the state claim to be losing money.
It was Richter’s goal heading into the session to make policies more affordable while making sure that the companies are profitable and able to cover claims if a major hurricane hits Florida.
“We can do something about it,” said Sam Miller, executive vice president of the Florida Insurance Council, an industry group. “I suspect we’ll reach a compromise that’s acceptable to the Senate president, OIR (Office of Insurance Regulation) and hopefully the governor.”
If the private insurers aren’t solvent enough to meet claim demands, Floridians with insurance policies could be on the hook for billions because of a financially shaky alignment that depends on a state-backed property insurer and a hurricane catastrophe fund.
Florida’s worst-case $2.1 trillion exposure dramatically exceeds any available insurance coverage.
Thursday’s setback on the broad reform bill came a day after another proposal that would have deregulated rates for insurers was withdrawn by its sponsor. Gov. Charlie Crist had already promised to veto that bill.