editorial

There always comes a point late in the legislative session when lawmakers must confront the question of when to say “no.” For those who have a highly invested constituency, or happen to be facing the next step in their political careers, “no” is not an easy answer to make. Let's take, for example, Senate President-elect Jeff Atwater (R-Palm Beach), who is facing a well-funded challenge by former Senator Skip Campbell, the current poster boy for the Florida Justice Association (read: trial bar). Of course, another example springs to mind — Senate Banking and Insurance Commissioner Chair Bill Posey (R-Rockledge), who is already measuring the drapes for his congressional office in Washington, D.C.

This brings us to the point of one of the more contentiously proposed changes in the assessment base of the Citizens Property Insurance Corporation. With the residual market's exposure heading nowhere but up, business owners are seriously starting to balk at the possible assessments they might face, assessments that could split that fine hair between being profitable or going under. That is why the Florida Chamber has been waging a less-than-silent war against what it describes as another business “tax” that hampers the ability of owners to plan for the future.

Sending less-than-subtle messages about what a huge residual market assessment could mean to the business community, the Chamber, among others, has lined up in support of a bill that would offer business owners the opportunity to purchase a non-assessable policy at higher rates. In exchange for paying higher premiums, the policyholders would be subtracted from Citizens' assessment base and exempt from paying any assessments levied by the insurer.

From a business owner's point of view, it is not a bad bargain. The first rule of business is to isolate as many fixed costs as possible so that there is leeway in the budget. Therefore, owners can respond to seasonal changes, which may necessitate hiring more staff or offering discounts during times when sales volume is heavy. While such a quid pro quo might favor the business community, one question remains: How will it affect the homeowners and business owners who can't avail themselves of the option?

The business community's position is that if business owners opt to buy non-assessable policies and pull out of the insurer's assessment base, then it would be offset by the decrease in the insurer's exposure. However, no actuary of note seems willing to ride into town and stake his reputation on that equation. Thus, it remains unclear whether an exodus of businesses to the private market under non-assessable policies would increase the assessment burden on the remaining policyholders. So it would seem that the issue has come full circle, back to the place it started — namely, politics.

The conventional wisdom is that the Chamber's proposal is one that may languish on some House or Senate calendar long after the two chambers drop the proverbial white handkerchief at the end of this year's legislative session. Or perhaps it will be amended on some other bill that will meet a similar fate. It is the number one politically viable way to kill off a measure while stopping it well before anybody would have to take a public stand and vote it up or down. That is how Atwater and Poesy will walk away by calmly saying, “We just ran out of time.” If only it was that easy!