TALLAHASSEE, Fla. — Can Florida lawmakers save the state’s crumbling property insurance market from collapse? That’s the goal this week as members returned to the capital for a special session. Before them, a large reform bill that critics call an "insurance bailout."
Among its many provisions is a plan to cut incentives to sue insurers by eliminating “assignment of benefits” and one-way attorney fees. The bill forces insurers to respond to claims faster and policyholders to file sooner.
It raises qualifications to get the often cheaper state-backed Citizens policies to reduce Florida’s exposure in the event of a catastrophe. Plus, the legislation offers another reinsurance bailout via a billion-dollar program funded by taxpayers.
“The whole thing in Tallahassee is when both sides find issues with it— it’s a fair and balanced bill,” said Senate President Kathleen Passidomo (R-Naples). “I believe it is.”
Passidomo told us reforms aim to bring in more private competition and, within the next year and a half, drop prices. If not, she warned, insurers will be held accountable.
“I don’t want it to be a scenario where all the reforms that are in place are working, and the rates don’t come down,” said the Republican leader. “If that happens, there will be hell to pay.”
So far, the reaction to the plan is mixed. Attorneys have complained it’ll cut court access. Consumer advocates think rates will get worse before they get better. Former state senator and current Security First Insurance CEO Locke Burt called those criticisms “wrong.”
He said the plan addresses insurers’ two biggest issues, high-priced reinsurance and litigation costs.
“The costs are going to go down when the litigation goes down— and under current Florida law, those costs have to be passed on to consumers,” said Burt. “We are a regulated industry.”
Democrats, meanwhile, have found little to like in the bill. They offered their own on the House floor, Monday. It had more dramatic changes that included a mandated rate drop, premium caps, and making Florida’s Office of Insurance Regulator an elected post.
Republicans voted down the ideas. Their leaders said changes would drive more insurers out of the market. Following the defeat, House Minority Leader Fentrice Driskell (D-Tampa) warned the Republicans' policy would do little to help.
“I’m not at all confident that Floridians are going to see rates any lower than they are today,” she said. “The Republican-led legislature has had control for all these years and has failed and refused to fix this property insurance market— and now it’s Florida homeowners from this day and going forward.”
Democrats will now likely try to amend the GOP bill in committee and on the floors over the next two days. It’s all likely for posterity, however, as Republicans now have supermajorities. They expected to send their legislation to the governor by Wednesday.
