90 Days Until Hurricane Season: Fla. Legislators Hope to Solve Problems

With less than 90 days to go until the 2005 hurricane season begins, Florida legislators are scrambling to solve a wide-variety of hurricane-related problems: Getting insurance claims settled; solving problems with Citizens Property Insurance; and cleaning up after the 2004 hurricanes.

As the spring session of the legislature begins in Tallahassee, a package of 20 insurance proposals drafted by the Special Com-mittee on Hurri-cane Insurance will be used as an outline.

Insurance industry obser-vers believe most of the proposals are modest. A few points, including a proposal to give consumers a choice of hurricane deductibles draw fire from insurers.

Probably the biggest issue lawmakers face is changes to the Florida Hurricane Catastrophe Fund, intended to help insurers recoup losses from big storms. Many insurers want to make it easier for companies to tap the fund by lowering the deductible they must pay. Others oppose making any changes, because they receive no benefits but share in the burden of funding it.

Insurance industry representatives are looking for other changes during the session, including strengthening the statewide building code and tightening laws regarding sinkhole coverage, a growing problem for insurers in several different counties.

“The Property Casualty Insurers Association of America wants to make certain consumers continue to have a large number of insurance companies competing for business, and that the state’s insurance market and economy remain robust and healthy,” William Stander, re-gional manager for PCI said. “As legislators move forward, PCI urges them to keep in mind that proposals which unduly restrict how insurers choose to conduct their business will ultimately restrict consumer choice.”

State Insurance Commis-sioner Kevin McCarthy asked property insurance companies to delay filing for rate increases until after the legislative sessions end. The request came too late, however, to rollback rates asked for by 14 companies that submitted rate change requests to the Florida Insurance Commission between Oct. 1 and Feb. 2 and obtained approvals to raise rates before the freeze on rate increases was requested by Florida CFO Tom Gallagher.

In addition to postponing new filings McCarty asked insurers to place pending filings “in abeyance” until May. More than a dozen rate filings are pending.

Questions about Citizens
One of the biggest concerns facing the legislature is Citizens, the state-run insurer of last resort. Bob Ricker, Citizens executive director blamed claims processing slowdowns on a failure of adjusters to efficiently do their jobs. In response, Gallagher suggested Citizens should reduce its outside adjusters and create a Catastrophe Center staffed by in-house adjusters and a call center to assist consumers with questions and concerns.

Several small insurance companies entered the arena and plan to take over Citizen’s customers, they include: Miami-based Northern Capital In-surance, Lake Mary-based First Protective, Ormond Beach, Fla.-based Security First Insurance Co., Gulfstream Property and Casualty Insurance Co., and Southern Oak Insurance Co.

Topics Florida Catastrophe Carriers Natural Disasters Hurricane Market