The Florida House held its second reading of SB 408 thisafternoon, hours after Rep. John Wood, R-Winter Haven, filed astrike-all amendment and the bill was "temporarily postponed."

Upon taking up the legislation, the representatives focused on avariety of specifics, including public adjuster reforms, actualcash value versus replacement cost value, sinkholes, time limitsfor claims, and rate filings. Speaker Dean Cannon, R-Winter Park,at one point noted, "We have been on the first amendment for anhour already, and there are 20 or so amendments."

Rep. Evan Jenne, D-Ft. Lauderdale, had a series of questions inseveral areas. At one point, he asked if the bill did not "make iteasier for consumers to have rate hikes." The characterization wasdisputed by Rep. Wood.

Rep. Jenne also asked, "In the area of mitigation, are we notwhittling away at mitigation discounts, here?" "No, you areincorrect," Rep. Wood noted.

Regarding CitizensProperty Insurance Corp., the state's largest property insurer,Jenne said, "It appears to me that the surcharges could be as highas 45 percent. Can you explain to me how the surcharges could be asmuch as 45 percent?"

"That percentage is correct," volunteered Rep. Jim Boyd,R-Bradenton, "because it applies to the three different levels ofassessments." If Citizens runs out of claim-paying funds, allinsurance polices other than medical malpractice and workers'compensation may be assessed.

Questions and Challenges

During the sinkhole discussion, Wood was asked by severalrepresentatives what structures providers would be required toinsure. "Under these proposed changes, only the primary structurewould be covered; that is the intent," said Rep. Wood. "We aremandating to companies that they offer sinkhole coverage andcatastrophic ground cover collapse coverage. We feel it is goodpublic policy to limit that mandate to primary structures."

Acknowledging the number of sinkhole questions from hiscolleagues, Wood described the sinkhole language as "veryconfusing."

While Wood declared the bill "consumer-friendly," otherrepresentatives did not share that view, and it was reflected intheir questions.

Peter Nehr, R-Tarpon Springs, noted that, "This new bill allowsfor a 45-day notice of cancellation [shorter than currenttimelines]. Can you tell me why you did that."

"That would apply only in the instance that an insurance companybecomes insolvent, and it is to protect FIGA (Florida InsuranceGuaranty Association)," Wood responded. The fast timeline willallow FIGA, which handles the claims of insolvent property andcasualty insurance companies, to address the situationquickly. 

Rep. Luis Garcia, Jr., D-Miami, circled back around to rates,and asked, "How much will this raise rates?"

"What the intent of this bill is, is to address the costdrivers," responded Rep. Wood.

Rep. Boyd added, "Rates still have to be filed and approved bythe Office of Insurance Regulation. There is a method to make surerates are adequate and fair and actuarially sound."

Garcia asked again, "Bottom line: Is the cost of insurance goingto increase, yes or no." "I would predict, no," Wood replied.Seemingly unconvinced, Garcia said he would save further commentfor debate.

The strike-all amendment was finally adopted late in theafternoon on a voice vote; SB 408 now advances to a third readingin the House.