Busy Week for Insurance Legislation
Several legislative committees will hear bills this week relating to key insurance issues. The House Banking and Insurance Subcommittee is expected to consider a bill allowing commercial motor vehicle and personal lines property and casualty insurance policies to be posted to the Internet rather than physically delivered in certain circumstances. The House committee also is expected to take up a proposal that would convert the Florida Insurance Guaranty Association (FIGA) assessment mechanism from a pay-and-recoup system to a pass-through system like other statutory assessments. The benefit of the change is that it would alleviate the need for insurers to pay the assessments up front and then make filings to recover the amounts over 12 or more months. FIGA, on the other hand, has questioned whether the revised process would allow it to receive money quickly enough to pay claims in the event of insurer insolvencies.
The Senate Banking and Insurance Committee will hold a workshop this week on its property insurance reforms. Among its proposals, the committee is considering reducing the size of the Florida Hurricane Catastrophe Fund by $1 million per year for three years beginning in 2014. The committee also would reduce the FHCF’s maximum percentage to 75% from the current 90% again over a three-year period. Other committee proposals include requiring the Office of Insurance Regulation to adopt an annual inflation factor below which insurer rates would not be considered excessive, allowing insurers to base mitigation credits on the same models they use for their rate filings, and establishing Citizens’ rates as the highest average rates among the top twenty writers in each county.
The Senate Judiciary Committee also will consider a Fair Claims Settlement Act this week. This proposal contains several potential reforms relating to claims-related litigation.