In a debate that included sinkholes, profits, “the American way” and—improbably—hens and eggs, the Florida Senate passed SB 408 this morning, the 125-page property insurance bill that has drawn considerable commentary from all sides. 

One of the bill’s leading opponents, Sen. Mike Fasano, R-New Port Richey, spent most of his floor time today—as he has in the past—on the issue of sinkholes. Fasano, whose legislative district includes the state’s sinkhole epicenter of Pasco County, attempted to convince his colleagues to remove a sinkhole amendment that repeals the requirement that private insurers include the coverage in their mandatory offerings.

The insurance industry has complained that fraudulent sinkholes claims have mushroomed over the past few years and cost them significant dollars, and sought relief from the mandate. Fasano has said that without the requirement insurers will not offer the coverage, and homeowners will be left with limited and expensive purchase options if banks and mortgage companies compel them to buy the coverage.

“If you vote for this bill with the sinkhole mandate removed, the insurance companies will get away with—I don’t want to say murder, but it is not far off,” Fasano said. “I ask you to oppose this anti-consumer amendment.”

Sen. Mike Bennett, R-Bradenton, countered Fasano’s argument, saying that forcing companies to sell a product on which they cannot make money is “not the American way.” (The bill passed with the amendment intact.)

Hens, Eggs, and the Free Market

Supporters of the bill have long called it a free market issue, and in today’s debate that issue also came front and center, with interesting commentary.

“This is not a free market issue,” said Sen. Ronda Storms, R-Brandon. “I can go to Publix and buy eggs, or I can go somewhere else. For insurance, it is already not a free market. People are forced to buy insurance as a condition of having a home. That goes back to what Sen. Fasano was saying about sinkhole coverage. People will be forced to buy it or lose their home, and I think people are going to lose their homes.

“I don’t mind if insurers make a profit, but I don’t want them to make a killing,”she continued. “Making a killing and making a profit are different. How can insurance companies say they are not making any money after the past few years of no storms? I think this bill gives insurers the opportunity to make a killing.”

When Sen. Bill Montford, D-Tallahassee, rose to speak in support of the bill, he quickly took up Sen. Storms’ Publix-and-eggs allegory. “A lot of my constituents have their own hens,” he said. “They don’t have to go to Publix for their eggs. And they don’t have a problem with their own insurance. What they have a problem with is the assessments from other people’s policies.” (Most insurance policies in Florida are subject to assessment if the state-created Citizens Property Insurance Corp. runs out of money. Citizens has grown to be Florida’s largest property insurer with 1.3 million policies.)

Sen. J.D. Alexander, R-Lake Wales, agreed that insurance in Florida is not a free market, but for different reasons. “Long ago, we left a ‘free market’ condition in Florida [by artificially suppressing rates],” he said. “Every year we have more significant consequences from that. I think this bill makes some modest steps to address some of the problems we have.”

Last to speak was the bill’s sponsor, Sen Garrett Richter, R-Naples. In defending the legislation, Richter said, “This bill is sincerely consumer-friendly. It attacks cost drivers, it attacks fraud, and it promotes competition. I have great confidence there are insurance companies ready to come in and write these policies.” Referencing the devastation from the flurry of recent storms across other southern states, Richter added, “If a hurricane hits Florida, we better have insurance companies that are solvent and can pay claims.”

House Action Needed

The companion bill in the House, HB 803, was added to that chamber’s second reading calendar on April 22, and will undergo further debate and votes.

After the second reading of SB 408 on April 27, William Stander, assistant vice president and regional manager for the Florida office of the Property Casualty Insurers Association of America, said, “The bill’s provisions, generally speaking, appear stronger than those in its House companion, HB 803.”

At today’s debate, Sen. Storms said, “I hope that the differences between the House and Senate bills will be so great that the House won’t take it.”