NU Online News Service, Feb. 9, 12:08 p.m. EST
The Florida Senate Banking and Insurance Committee earlier this week delayed action on a massive property insurance bill aimed at reforming everything from sinkhole claims to the amount of surplus a property insurer should carry.
The bill's author and committee chairman, Sen. Garrett Richter, R-Naples, decided to postpone a vote to advance the bill in favor of hearing more public comment and debate among committee members, according to the Florida Insurance Council (FIC).
Sinkhole provisions appear to be the most controversial items in the new bill, SB 408, which follows last year's omnibus property insurance bill, SB 2044. That bill was widely supported but vetoed by then-Gov. Charlie Crist.
Measures to address sinkhole issues in Florida were left out of SB 2044 with the hope that doing so would give it a better chance of passing and being signed into law.
The FIC said amendments proposed by Sen. Mike Fasano, R-New Port Richey, to this year's bill were defeated, but the discussion and vote took up a lot of time.
Sen. Fasano represents homeowners in Pasco and Hernando counties—areas prone to sinkholes. He attempted to introduce an amendment to change the way SB 408 defines a sinkhole.
According to a summary, the bill:
- Removes the requirement that a property insurer must offer sinkhole coverage and eliminates application of statutes governing catastrophic ground cover collapse and sinkhole loss coverage from commercial property insurance policies.
- Revises what constitutes a sinkhole loss, revises procedures for insurers and policyholders relating to standards for sinkhole insurance claim investigations, and revises the neutral evaluation process for sinkhole disputes.
- Provides changes to the procedures pertaining to sinkhole reports by professional engineers or professional geologists and repeals the sinkhole database.
The Florida Office of Insurance Regulation (OIR) and the Florida Senate Banking and Insurance Committee have recently outlined the problem sinkholes have become in Florida. The OIR concluded that the total cost of 24,670 sinkhole claims from 2006 to 2010 was about $1.4 billion and increased from $209 million in 2006 to about twice that in 2009. Many claims are coming from outside traditional sinkhole areas.
Meanwhile, the Banking and Insurance Committee advanced SB 178 to piggy-back last year's commercial deregulation bill, SB 2176, which excluded certain commercial insurance lines from the rate filing and approval process.
The new proposed legislation expands the exemption to all commercial lines and reduces the commercial auto threshold from a minimum fleet of 20 vehicles to one vehicle, said William Stander, assistant vice president and regional manager for the Property Casualty Insurers Association of America (PCI).
"Rate modernization is an important priority for PCI, and we urge the legislature to pass this bill during its upcoming session," Mr. Stander said.
The Senate committee will likely take up SB 408 the week of Feb. 21. The 2011 legislative session begins March 8. Read complete analysis of the bill here.
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