NU Online News Service, Feb. 25, 12:05 p.m.EST

A bill, with language supplied by an insurance trade group, toderegulate insurance rates for some commercial lines excludingthose exposed to catastrophic risk, has been introduced in theFlorida Senate.

The American Insurance Association (AIA), which helped draft themeasure, SB 2176, said the bill, has been sponsored by Sen. DurrellPeaden, R-Crestview.

According to its text, the legislation would exempt "specifiedtypes of insurance and commercial lines risks from certainrequirements of state law relating to the filing and review ofrates."

AIA noted that the bill only includes rates, not the relatedforms. The association added, "We're not aiming at all commercialcoverages – notably, property is excluded – but included arecategories that are competitive, unique, or involve sophisticatedinsureds."

AIA said the commercial lines covered under the bill wouldbe:

oExcess or umbrella.

oSurety and fidelity.

oBoiler and machinery.

oCommercial motor vehicle.

oErrors and Omissions,

oProfessional liability (except med mal).

oDirectors and officers.

oIntellectual property.

oEnvironmental liability.

oRisks with annual premium of $25,000 or more, excludingproperty.

In making its case for the legislation, AIA said that althoughthe Florida commercial market is healthy, there is a recent trendwhere Florida regulators are "applying strict control overcommercial rates" and delaying filing approvals.

Cecil Pearce, AIA vice president, said, "Some of the[regulatory] culture in Florida on the homeowners side has shiftedto the commercial side."

Mr. Pearce said after the 2004 and 2005 hurricane seasons,Florida saw a lot of "legislative reaction," where the goal was totry and have government fix the homeowners market. Now, he said,there is a "growing sense" that legislators realize the governmentfix is not going to work. The discussion has shifted, he noted, tohow insurance capital can be brought into the state.

There is also a drive, he said, to get the state's economy goingagain, as unemployment is over 10 percent. Attracting insurancecapital on the business side, Mr. Pearce said, will help businessesin the state grow.

To that end, AIA said it has lined up support from theAssociated Industries of Florida, a large business association inthe state.

Mr. Pearce said the proposal is "nothing radical," and opens uponly commercial lines that have healthy competition, are notimpacted by catastrophes, and have "products the business communityneeds to grow."

During the last legislative session, the Florida legislaturepassed a bill deregulating rates for some homeowners insurancecarriers, but the measure was vetoed by Gov. Charlie Crist.

Mr. Pearce said the buyers for the lines in AIA's proposed billwould be risk managers for businesses, rather than homeowners, andso the same concerns may not arise.

But he noted that it is an election year, and the legislaturealready has to cut another $3 billion out of the state budget, andso he expects there to be caution about any new idea such asderegulating some commercial lines. He said he hopes the bill goesthrough in the current legislative session, but acknowledged it maytake a couple of years to get it approved.

Mr. Pearce said AIA is meeting with the state's Office ofInsurance Regulation (OIR) on Monday to discuss the bill.

Brittany Benner, deputy director of communications at the OIR,said the OIR is aware of SB 2176, but is still reviewing it andtherefore had no comment yet.

Florida Insurance Commissioner Kevin McCarty opposed the billderegulating rates for select homeowners insurers.