Filed Under:Agent Broker, Agency Management

GOP Election Does Not Guarantee Veto Overrides

On Nov. 16, Florida legislators returned to Tallahassee for a quick three-hour special session during which many hoped they would take up measures dealing with both workers' compensation and property insurance.

Earlier this year, Gov. Charlie Crist had vetoed two bills that dealt with both types of insurance, but incoming GOP leaders had sent out signals this fall that they were ready and willing to override those and other vetoes. It takes a two-third vote of each chamber to override a veto.

In the end, however, incoming Senate President Mike Haridopolos, R-Melbourne, and incoming House Speaker Dean Cannon, R-Winter Park -- citing the lack of consensus and controversy attached to the bills -- decided to leave both insurance items off their to-do list for now. Instead, they overrode eight other vetoes by Crist, including a veto of a bill dealing with the windstorm mitigation grade of homes in coastal areas.

The retreat by legislative leaders -- who have increased the size of the Republican majority after the 2010 election -- could be a sign that their new beefed up numbers won't automatically translate into huge changes, especially in workers' compensation insurance.

Gov.-elect Rick Scott in November repeated his pledge to slash workers' compensation expenses once he takes office, but so far he has offered few specifics other than to say that he believes additional lawsuit restrictions and tort reform could result in additional savings.

Veterans of past workers' compensation fights in the Legislature remain somewhat skeptical about how much work could be done in the near future. The last major rewrite of Florida's workers' compensation laws was in 2003.

"Workers' compensation is always a fight regardless of what the issue is,'' said Tammy Perdue, general counsel for Associated Industries of Florida (AIF).

"Good Policy" Jettisoned During Special Session

Crist, who bolted the Republican Party to run in the U.S. Senate race as an independent, angered legislators last spring when he vetoed a long list of bills, including a comprehensive property insurance bill.

Shortly after the election, Cannon and Haridopolos outlined which bills they said they would consider during a one-day special session. They said they chose bills that had passed by wide margins and had support from both Democrats and Republicans.

There had been hope that lawmakers might be willing to reconsider Crist's veto of SB 2044. The comprehensive property insurance bill was passed by a 32-6 margin in the Senate and an 83-33 vote in the House. The bill included many measures sought by insurers, including a three-year claims filing deadline for hurricane claims. The bill also would have made it easier for insurers to get approval for rate hikes to cover the cost of reinsurance and inflation.

Sam Miller of the Florida Insurance Council said that while there were a lot of "important" items included in SB 2044, some people in the industry took the position that it could be better to start over for the 2011 session.

The bill that passed last session did not address sinkhole claims, which is a growing concern for carriers. The bill also did not include a change in how much in replacement costs insurers must initially pay for personal items.

One bill that was on the initial list handed out by Cannon and Haridopolos was HB 5603. This bill -- which dealt primarily with the Department of Financial Services -- included a cap on how much money physicians could get paid for dispensing drugs to injured workers.

The bill had been a top priority of Chief Financial Officer Alex Sink and groups like AIF; supporters said it would save about $34 million a year for employers. Perdue said that it had been estimated that the change would have trimmed next year's workers' compensation rate hike by 1.1 percent. Rates will go up 7.8 percent in January.

The bill was opposed by many in the medical community, including the Florida Medical Association (FMA).

One of the beneficiaries of Crist's veto had been very active during the election season. Reports from this past summer said that two South Florida doctors opposed to the bill gave money to a political committee that helped Attorney General Bill McCollum in his losing primary to Rick Scott. That same company run by the two doctors, Automated HealthCare Solutions, also gave the Republican Party of Florida nearly $800,000 after the GOP primary. The company also donated $195,000 to Let's Get to Work, the political committee set up by Scott.

When first asked about it, Cannon brushed aside any political concerns.

"That bill passed overwhelmingly in both chambers. It was good policy then, we think it's good policy now," Cannon said in early November. "It doesn't really matter to me who supported it or opposed it if both chambers passed it with near unanimous majorities."

By mid-November, everything changed. Both the FMA and the Florida Orthopaedic Society hand-delivered a letter to Cannon and Haridopolos that said that HB 5603 could adversely impact injured workers and significantly limit the dispensing of drugs by doctors. The letter said that direct dispensing of drugs to patients from physicians is "one of the most safe and efficient processes" within the health-care system. The letter also faulted the bill because the drug dispensing provision did not surface until very late during the 2010 session.

Two days before the scheduled special session, HB 5603 was dropped from the veto override list. The reversal drew a sharp rebuke from Sink, who lost the governor's race to Scott.

"This gives the appearance that the Florida Legislature and Gov.-elect Rick Scott are getting square with the special interests who funded their campaigns," Sink said. "This was a perfect opportunity to save taxpayers millions of dollars and reduce workers' compensation costs for Florida businesses. Once again, Tallahassee business-as-usual prevailed."

When asked about it, Cannon said that Sink "is entitled to her opinion," but he said later that there were Democratic legislators who also were opposed to the veto override.

Windstorm Rating Bill Approved

While legislators scrapped plans to take up insurance bills, they did override Crist's veto of HB 545. The measure repeals a requirement that home sellers in coastal areas disclose to buyers the ability of a home to withstand tropical force winds from either a tropical storm or a hurricane.

The new requirement was scheduled to kick in this January, but the Florida Association of Realtors pushed the bill to repeal the requirement, arguing that it would hamper home sales because it would force homeowners to go out and get an inspection that could cost anywhere from $150 to $250. Realtors noted that a similar requirement for expensive homes insured by Citizens Property Insurance Corp. had previously been repealed.

Crist vetoed the bill, saying the windstorm mitigation grade was a "consumer friendly" requirement that would help "Floridians seeking the right home for their needs."

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