The Republican-controlled Florida Legislature championed the idea of free markets at nearly every turn in the first few weeks of the 60-day session. However, so far it is clear that the insurance industry may not get everything it wants, even from a decidedly pro-business legislature.
A comprehensive property insurance bill intended to address cost drivers that affect the bottom line of insurers is moving—but not without much debate, controversy and changes pushed by those who say the measure is unfriendly to consumers.
This is not what the insurance industry expected.
“Over the last year the industry has benefited from hearing from the governor and legislative leaders who came through our conferences telling us that there was a new day in the Capitol,” said William Stander, assistant vice president and Florida regional manager for the Property Casualty Insurers Association of America.
Sean Shaw, the insurance consumer advocate under CFO Alex Sink, has blasted many of the proposals under consideration. He agrees that the insurance market is still fragile, but he says there should be a more measured response.
His initial legislation called for paying the depreciated cash value; the homeowner would get the rest of what was owed upon completion of the repairs. Florida had a similar process in place until 2005 when legislators mandated the change amid an outcry following a series of hurricanes that hit the state.
Richter’s bill, however, is far from being the most substantial insurance bill under consideration this year. Florida lawmakers also have resurrected a bid to let insurers raise their rates without much interference from state regulators. This year’s version of the “deregulation” bill would let insurers raise their statewide average rates by 15 percent and individual policyholder rates by as much as 30 percent a year.
Sen. Alan Hays, R-Umatilla, and the sponsor of SB 1330, contends that the legislation is about giving consumers the choice to decide if they want to pay more in premiums in order to keep their coverage with the same company.
“Ultimately what I’m trying to accomplish is to get the state of Florida out of the insurance business and return Citizens to being the insurer of last resort,’’ Hays said.