Florida has made a good start on addressing some of the state’s most pressing insurance issues such as pursuing ways to depopulate the state-backed homeowners insurer and reforming the no-fault auto insurance law, but more remains to be done, says Governor Rick Scott.
Speaking at the Florida Association of Insurance Agents Annual Convention and Education Symposium, Scott laid out his perspective on the state of the state’s insurance environment.
At the top of his agenda is his ongoing to push to depopulate Citizens Property Insurance Corp. that now has 1.45 million policyholders.
“It has $500 billion in risk; why you would ever do this makes zero sense,” said Scott. “We have to fix it. We have to fix it. There is no way this can continue.”
Scott said that one issue that is largely overlooked when it comes to Citizens is that though it is backed by policyholder assessments, no one knows if policyholders around the state have the ability to pay that bill if it becomes due.
“The average Citizens premium is $2,300 and potential assessment is $1,200,” Scott said. “How many families have that in the bank? We have no idea. How many would have it after a hurricane? We have no idea.”
Scott told the agents it is up to them to talk to policyholders and raise their awareness of the financial burden they could face. Citing the example of personal injury protection (PIP) fraud, he said it is essential if lawmakers are to ever seriously tackle the issue.
“At the capital things only get done when people aggressively demand it,” he said
Scott praised Rep. Jim Boyd, R-Bradenton, who was the primary architect of the bill that eventually became the basis for the PIP reforms.
After decades of effort, lawmakers finally rewrote the law, narrowing the list of eligible providers, tackling medical utilization and imposing fee schedules. The new law also includes some tort changes and gives law enforcement officials, regulators and insurers more ways to attack fraud.
“I don’t know how we would have accomplished it without him,” said Scott.
Scott warned, however, that already people are looking to scam the system and it will take vigilance on the part of all concern to ensure the new law’s success.
Boyd said that while he agreed with the governor that PIP will be an ongoing concern, he has no plans to introduce another bill on the issue in the near future.
“I think we need to take a break for a little while,” said Boyd, who is also CEO of Boyd Insurance & Investment Services. “We need a year to see the effects on fraud and the results of premium reductions.”
While property issues were Scott’s primary focus, he did restate his longstanding opposition to the federal Affordable Health Care Act, dubbed “Obamacare,” which is currently being weighed by the Supreme Court.
Scott was among the first state governors to come out against the bill and has turned away millions in funds to start implementing its provisions.
“The government should not become a special interest group and dictate to the insurance industry how to run its business,” he said.
Scott’s comments were favorably received by the some 500 agents in attendance at the FAIA’s annual Saturday morning breakfast meeting.
FAIA President Jeff Grady said Scott’s goals closely align with the association, which didn’t support Scott in his initial bid for governor.
However, the association has since largely supported Scott in his campaign for changes to Citizens and after he made PIP reform his top legislative agenda.
Grady said that agents support Scott’s view that the industry needs less regulation as part of an overall change in how private companies view the state.
“We can’t agree more strongly with the governor’s desire to fix Citizens and reduce regulation,” said Grady. “There is a lot of capital out there and we just need to find it a way to come to Florida.”