Florida lawmakers are a step closer to passing a large insurancebill to reform the state's last-resort insurer.

The Florida House on April 30 passed an amended version ofSenate bill 1770 to change what properties can be underwritten byCitizens Property Insurance Corp.

Still, there are many provisions to be worked out between thestate Senate and House.

Donovan Brown, state government relations counsel for theProperty Casualty Insurers Association of America, says the bill is“another incremental step forward in the attempt to make Citizensthe insurer of last resort by reducing the amount of policiesentering into our bloated residual marketplace.”

Citizens has grown to become the largest property insurer in thestate.

Basically, the Senate and House agree on two major componentsfound in each bill—the appointment of an inspector general to keepan eye on Citizens' operations and the creation of a clearinghousein an effort to keep policies in the private market.

The clearinghouse would allow new and renewed policies to beshopped to private insurers before landing at Citizens. Acomparative rate analysis would be generated.

Brown says the bills (The House basically amended SB 1770 withits own version, HB 909) agree on nearly 20 provisions, but aboutthree dozen more are different or aren't included in the Senatebill.

Among the provisions to be hashed out concern what propertiescan be taken by Citizens in terms of location and insured value.The House bill would ban Citizens from writing any structure with avalue of more than $1 million starting in 2014. The cap would belowered gradually to $700,000 in 2017.

The House bill also has no language on rates. The Senate billoutlines a plan to keep the 10-percent glide path of rate increasesadopted previously. Homes taken out of Citizens by the privatemarket but then return within 18 months would also hop back on theglide path.

However, the Senate bill would require Citizens' rates to beactuarially sound for new business starting Jan. 1, 2014.

“Much work still needs to be done to address Citizens' rateinadequacy in order to depopulate Citizen's policy count and reducethe potential for a Citizens 'hurricane tax' to negatively impactFlorida consumers,” Brown says.

Nearly all Florida policyholders can be assessed by Citizens inthe event it needs money to pay claims—amounting to a “hurricanetax.”

The R Street Institute, a libertarian think tank, says theCitizens reform bill “will not stop the bleeding, but it is a goodstart in slowing it down.”

The Senate will now consider the House's amendments. They couldbounce the bill back to the House again if changes are made. TheLegislative Session ends May 3.

“The Senate would do well to concur quickly and send the bill toGov. Scott's desk,” adds R Street Florida Director Christina R.Camara.

Interestingly, the House defeated a stand-alone clearinghousebill that would have allowed policies to be placed into the surplusmarket. Lawmakers also considered this option a year ago. It toofizzled.