A bill banning future Florida-only insurer subsidiaries and expanding the scope of coverage by Citizens, the state-created carrier, passed the Florida State Senate yesterday.
Passed by a unanimous vote, the bill, which is opposed by the insurance industry, was sent on to the House. It would also require national insurers with in-place subsidiaries to disclose their overall profits when requesting a rate hike in Florida.
Sam Miller, executive director of the Florida Insurance Council, said the bill could prevent a large national writer from coming to the state to write policies.
Republican Gov. Charlie Crist made banning the so-called "pups" companies the focus of his recent lobbying efforts. He originally wanted to ban even existing state subsidiaries such as those owned by State Farm, Allstate and Nationwide.
In addition, the measure will freeze rates for customers of the state's insurer of last resort, Citizens, and expand its coverage.
The bill must be given final approval by Friday before the House adjourns its session.
Under the current law, a customer must enroll in a private insurance plan unless that plan costs 25 percent more than state-funded coverage.
The governor's plan would ease that cap, allowing people to qualify for the state program even if a private insurer charges just 15 percent more than the state.
In addition, the measure bans the state from raising Citizens rates until Jan. 1, 2009.
Mr. Miller said now was not the time to expand Citizens coverage with the state facing many more seasons of huge losses.
"The state is rolling the dice that there will be no major storms in the next couple of years, and I think there will be," Mr. Miller said.
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