Protecting Reforms Rests with Senate and Governor
The Florida House of Representatives has passed a bill seeking to unwind key provisions of the 2022 insurance reforms that have led to recent improvements in the market. The House amended Senate Bill 832 to include a so-called “prevailing party” attorneys’ fee provision despite clear statements from the Office of Insurance Regulation, the Governor and the insurance industry that doing so will lead to higher insurance rates.
The new provisions of HB 832 are similar to laws adopted prior to 2022 that were intended to improve the market. Unfortunately, those efforts proved ineffective in stemming the rise in lawsuits, escalating losses and loss adjustment expenses, increased premiums and reduced options for policyholders. During that time, Citizens Property Insurance Corporation grew at an alarming rate. Conditions in the Florida market began to improve only following the legislature’s more comprehensive reform effort in a December 2022 special session.
The Florida Office of Insurance Regulation showed that while prior to the reforms this state had among the highest percentage rate increases in the country, Florida had the lowest percentage increase last year. Existing insurers have increased their appetites for new business and OIR has approved a dozen new insurers to begin writing in Florida. This has led to increased options for policyholders, a reduction in Citizens’ policy count and greater overall stability in the market than just a few years ago.
The anti-reform amendments to SB 832 are consistent with approaches the House has taken throughout the session. However, the Senate thus far has not advanced any proposals that would undermine the 2022 reforms. The fate of SB 832 therefore is unclear, at best, as we now enter the last regularly-scheduled week of the session. In addition, Governor Ron DeSantis has repeatedly said he has no appetite for legislation that would reverse market improvements.