NU Online News Service, March 7, 12:09 p.m.EST

Lawmakers in Florida gave up on a bill industry experts saywould have at least given homeowners another insurance option.

HB 245, a measure that would have allowed surplus lines carriersto depopulate the bloated insurer of last resort, sputtered anddied during the last week of the legislative session.

"It just became really controversial," says Samuel Miller,executive vice president of the Florida Insurance Council."Whenever there's a chance rates could raise, even if it's in thebest interest, these types of measure are tough to getthrough."

Citizens Property Insurance Corp., run by the state, has grownbeyond its means to become the leading property insurer in Florida.The bill was intended to reduce some of the insurer's exposure byallowing the nonadmitted market to take policies.

Detractors worried policy rates would increase, especiallybecause surplus carriers are not regulated.

Miller says the state Senate attached an amendment that wouldhave required insurers to get written prior approval fromhomeowners before a take-out could occur.

"It wasn't practical," he says. "That would have potentiallyrequired tens of thousands of signatures."

When the bill traveled back to the House, which had alreadypassed the measure, they chose not to strip theamendment—effectively ending the bill's journey days before thesession is scheduled to end.

The death of HB 245 did not sit well with the free-market thinktank Heartland Institute.

"This would have reduced the overall exposure of Citizens,transferred that risk away from taxpayers, and decreased thelikelihood or severity of every Floridian having to paypost-hurricane taxes. Unfortunately the legislature today optedagainst expanding consumer choice," says Christian Camara, Floridadirector for Heartland.

Former state legislator and Heartland senior fellow Don Brownsays he doesn't think most Citizens policyholder understand theyare at risk of being surcharged up to 45 percent if a storm occurs.Citizens is then able to levy assessments on most Floridapolicyholders.  

"Worse still is the assessment risk that will now continue formillions of non-Citizens policyholders in Florida," he says. "Asfor me, I've had about all the legislature's consumer protectionthat I can afford."