NU Online News Service, May 3, 4:05 p.m. EDT

The Florida Legislature passed a bill that would allow property insurers to apply more quickly for rate increases of up to 10 percent under certain conditions.

Current law allows insurers to make an expedited filing for increases of up to 10 percent due to changes in the cost of reinsurance, according to William Stander, assistant vice president and regional manager for Florida for the Property Casualty Insurers Association of America (PCI).

This bill, SB 2044 (http://tinyurl.com/364d3w3), extends the reasons to the cost of financing products used as a replacement for reinsurance, or changes in an inflation trend factor published annually by the Office of Insurance Regulation (OIR).

Expedited filings, Mr. Stander said, are still reviewed and approved by the OIR, but they are reviewed on an expedited basis.

The bill also restricts the amount of time homeowners have to file a claim after a storm to three years (down from five).

Mr. Stander said insureds still have five years to assert their defense, but must make an initial filing of damage within three years.

That lower deadline was hard fought on both sides–the industry, which sought the time limits to stem the flow of new and reopened claims seen after the 2005 storms, and the public adjusters, who viewed it as a major restriction on how they operate in Florida.

The bill also reauthorizes a 2009 requirement that insurers get state permission for rate hikes, and requires insurers to file detailed financial information about affiliates they hire for some services, addressing the recent publicized concern of so-called "hidden profits."

Insurers also may now withhold part of a claim payout until policyholders can demonstrate the funds will actually be used to make repairs.

While declaring that he is "not overly enthusiastic about the bill," Florida Insurance Consumer Advocate Sean Shaw did concede that the legislation benefits both companies and consumers. Most stakeholders seem to agree, offering lukewarm and cautious praise or condemnation.

Even one of the bill's sponsors, Sen. Garrett Richter, R-Naples, said the legislation was only the beginning of the long process of solving the state's property insurance challenges.

Florida Insurance Commissioner Kevin McCarty declared soon after the bill passed that he generally supported the legislation.

This may put him at odds with Gov. Charlie Crist, an unusual position. The two are normally in lockstep when it comes to insurance matters. Gov. Crist has not offered significant opinions yet on the bill but has repeatedly declared that he will veto any legislation that includes increases in premiums.

The bill has not yet been presented to the governor.

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Florida Passes Property Insurance Measure Supported By Insurers

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