PIA of Fla.: Lawmakers ‘Mulling Over’ Filings; Bill to Require ‘Loyalty Clause’

A “loyalty clause” prohibiting insurers from canceling a policy for homeowners who have been with a carrier for three or more years is part of a bill filed in the Florida Legislature by Sen. Ron Klein, D-Boca Raton, according to a “sneak peek” at the upcoming legislative session released by the Professional Insurance Agents of Florida.

The bill also proposes abolishment of the new “use and file” rate filings that allow insurers to start charging higher rates the day they apply for permission from the state to get a rate increase.

“Florida’s legislative session doesn’t officially begin until March 7, but state lawmakers are busy in committees mulling over proposed new laws,” Mark O’Connell, PIA of Florida chief executive officer said. “2006 is an election year and the devastation caused by the hurricanes of the previous two years has brought property insurance to the forefront. I can’t imagine this not dominating the agenda.”

Klein also would like to see insurers appealing rate increase rejections to go through the Department of Administrative Hearings, not the current arbitration panel that includes representatives from the insurance industry, which he thinks are biased.

Sen. Steven Geller, D-Hallandale Beach, has co-sponsored a bill with Rep. Tim Ryan, D-Dania Beach, to use Florida’s extra sales-tax revenues to offset Citizens Property Insurance Corp.’s deficits, instead of assessing insurance companies. Tom Gallagher supports this bill while Governor Bush doesn’t.

A host of legislators are joining Klein to propose another Citizens initiative to allow the insurer of last resort to lower its rates in areas of the state where no other insurance companies write new policies. Klein explains that it’s not likely that Florida will be able to lure new insurers into the state so “let’s give homeowners insured with Citizens a fair price instead of an artificially hiked price.”

Rep. John Legg, R-Port Richey, has proposed a bill that would stem the illegitimate sinkhole claims that have wreaked havoc on the Tampa Bay area’s property insurance market. His plan calls for the establishment of a two-step sinkhole verification process supervised by a geologist or engineer. If the initial test concludes that no sinkhole is present, the property owner must pay $1,000 toward the cost of a more complex second test.

Sen. Mike Fasano, R-New Port Richey, has proposed a law to avoid “cherry picking” by insurers. This bill requires insurers who offer a certain type of insurance elsewhere to offer it in Florida. “If a company writes policies here for auto, life, and health insurance, and writes property insurance elsewhere, they must write property insurance here,” says Fasano. “You can’t cherry-pick.”
PIA of Florida legislative affairs director Ron Villella said that part of the situation is that in Florida this is an election year.

“That means it’s more challenging to sort out the bills that have strong support and those that are introduced for political reasons,” Villella said. “This being an election year means we need to pay close attention to the details and I will keep vigilant over any insurance-related bills that surface.”

Topics Florida Carriers Legislation Property