House, Senate differ widely on property insurance
Published: Friday, April 26, 2013 at 8:07 p.m.
Last Modified: Friday, April 26, 2013 at 8:07 p.m.
TALLAHASSEE - A showdown over property insurance reforms is brewing in the Florida Legislature after big rate increases approved by the Senate Thursday were left out of House legislation unveiled 24 hours later.
House leaders are proposing a much less controversial approach to shrinking state-run Citizens Property Insurance that ignores a Senate plan to raise rates significantly for new Citizens customers.
The political dynamic is a reversal from years past, when the more moderate Senate treated rates increases with more skepticism.
Conservatives in the House often have advanced aggressively free-market property insurance reforms, but the chamber's current and future leadership includes a number of representatives from areas with high insurance rates, a factor some lawmakers cited in the softer approach this year.
House Speaker Will Weatherford, R-Wesley Chapel, represents a sinkhole-prone area north of Tampa shunned by many private insurers.
"I've been saying all year that whatever we do on property insurance there have to be some incremental changes," Weatherford said Friday. "You cannot solve the challenges of the property insurance market overnight."
Weatherford described the House bill as a "bipartisan" approach that includes significant input from Miami lawmakers who "have a lot of sensitivity to this issue" because of South Florida's high insurance rates.
Rep. Bryan Nelson, R-Apopka, noted that Gov. Rick Scott also has expressed concerns about raising property insurance rates.
"We're trying to be rate neutral," said Nelson, chairman of the House Insurance and Banking Subcommittee. "The governor, that was one of the things he asked us - to try to be as rate neutral as possible. In our bill there's really no rate need."
The House bill - introduced as an amendment Friday to less sweeping insurance legislation - relies primarily on a "clearinghouse" program that forces insurance agents to shop policies around more aggressively in the private market before going with Citizens.
Most lawmakers have expressed support for the clearinghouse as a pain-free way to steer customers away from Citizens, now Florida's largest property insurance company with 1.3 million policies.
Industry experts say more than 200,000 current Citizens customers could find equal or cheaper rates in the private market through the clearinghouse, helping shrink the state-run insurer's financial exposure in a major hurricane.
The clearinghouse provision also is included in the Senate legislation, but senators narrowly voted to go further Thursday with a series of controversial measures to kick policyholders out of Citizens and discourage new customers from entering the company.
Most of those proposals were stripped from the House legislation or moderated.
Citizens' cap on coverage - currently at $1 million - would slowly shrink to $700,000 in the House bill instead of the $500,000 proposed by senators. And unlike the Senate bill, there is nothing in the House legislation that allows private insurers to borrow from Citizens' $6 billion surplus.
Another sign that House members are leery of any provision that hikes premiums: The chamber narrowly voted down an amendment mirroring language in the Senate bill that allows both Citizens and private insurance carriers to raise rates to purchase more hurricane reinsurance protection.
Rep. Mike Fasano, R-New Port Richey, led the charge against the reinsurance amendment, which died on a 61-53 vote.
Fasano, a prominent crusader against property insurance rate increases, described the mood in the House this year "a reverse" from years past.
"The future leaders of the Florida House are pretty much steering the direction on insurance issues as to what's going to happen to consumers," Fasano said.
Whether House leaders will stick to their guns or move closer to the Senate position is still unclear. Weatherford said House and Senate negotiators will try to "hammer out the differences" as lawmakers move toward adjournment next week.
"If something's going to pass, let it be the House bill," Fasano said, adding, "The Senate bill is just unacceptable. It's definitely going to raise rates."
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