NU Online News Service, July 29, 2:54 p.m. EDT

Florida Sen. Mike Fasano, R-New Port Richey, is calling for a repeal of this year's massive property-insurance bill, SB 408, following the state insurer of last resort's decision to file for an average 400+ percent rate increase for sinkhole coverage.

"We need to repeal it completely and go back to the 10 percent cap [on rate increases]," says Fasano during a radio interview on WMNF 88.5 in Tampa.

Fasano was one of the leading opponents of SB 408, which contains numerous property-insurance reforms, including a provision that allows Citizens Property Insurance Corp. to increase sinkhole-insurance rates beyond a 10 percent cap that applies to other types of insurance it offers.

Fasano tells the radio station that even though he was against the bill, he never imagined this type of rate increase.

"Never in a million years…never did I think this would happen," he says.

Citizens' board has approved filing the rate request with the Florida Office of Insurance Regulation (OIR). In some parts of Florida, rates for sinkhole coverage—which is required by some lenders—could go up more than 2,000 percent.

OIR says it has not received the filing. It has 45 days to approve or deny the rate-hike request.

Plans for a public hearing on the rates are unknown, but Fasano wants Insurance Commissioner Kevin McCarty to hold statewide hearings for consumers so they do not have to travel all the way to Tallahassee.

"In light of these almost incomprehensible rate increases, I respectfully expect that all Floridians be given the chance to have their voices heard on this issue before the [OIR] rules on the application," writes Fasano to McCarty.

Fasano says it is "almost beyond comprehension that Citizens would even propose such outrageously high premium increases."

He adds, "The economic impact on homeowners will be devastating."

During his radio interview, Fasano says the increases are on top of wind, flood, fire and theft insurance many homeowners need in order to get a mortgage.

The OIR says it has received Fasano's letter and will take the senator's comments "under advisement."

Fasano says he has not heard from the OIR.

Citizens says its proposed rate increases are based on loss history. The last-resort insurer says it lost more than $200 million on sinkhole coverage in 2010, which was about twice as much as the previous year.

Consumers have the opportunity to email comments about the Citizens rate hikes on the OIR website.

Special Reports /

Fla. Sen. Wants SB 408 Repealed; Sinkhole Rate Request ‘Devastating’

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