Wednesday, January 10, 2007

It's Official: FL Legislature Headed for Special Session

House Speaker Marco Rubio and Senate President Ken Pruitt made it official yesterday - the Florida Legislature will convene in special session. The aim of the week-long session will be to tackle the issue of property insurance.

There are many solid previews of the session that have hit the MSM and blogosphere already, so we will try and give you the best of these. Here goes.

Though Governor Crist has not yet proposed a detailed plan, he has renewed his pledge to bring relief to Florida homeowners.

"Big insurance has a new day coming, and it starts the 16th."
While Crist warns against unreasonable expectations, he says that "people deserve high hopes...and I have them."

Governor Crist from a press release yesterday:
“Finding relief for Floridians burdened with skyrocketing insurance costs is my top priority,” said Governor Crist. “I pledge the full resources of my office to work with the leaders of the House and Senate to solve the insurance crisis.”

The Senate has introduced a draft bill that aims to reduce, or rollback, rate current rate hikes; allow for greater access by insurers to the Florida Hurricane Catastrophe Fund; and provide homeowners the right to forgo wind damage coverage and/or coverage for the contents of their homes.

For customers of the Citizens Property Insurance Corporation, the Senate bill calls for a one-year rate freeze.

For more details on the Senate plan, go over to Q at PBP for a pretty good summary.

A group called The Florida Hurricane Crisis Coalition has also issued its recommendations. The FHCC, while optimistic that a solution can be found, is cautioning against overblown expectations:
“Members of the Florida Hurricane Crisis Coalition applaud the new administration and legislative leaders as they prepare to find long-term solutions to our property insurance crisis. All Floridians must recognize that this crisis did not occur overnight and there is no single silver bullet solution. But with a focused and thoughtful approach, this state can work toward providing a viable, competitive private insurance market to benefit residents and business owners in Florida,” said FHCC co-chair John Sebree.
FHCC is a coalition created by the Associated Industries of Florida, and comprised largely of business groups. In issuing their final recommendations for the special session, they warn against short-term solutions:
The preeminent concern for the business community is that our elected leaders take a long-lasting approach in providing for a viable, competitive, private insurance market. Such a market is essential to ensuring available andaffordable property insurance.
The principles that they have adopted are essentially those of Rep. Don Brown (R), who will oversee insurance legislation in the House. View the final recommendations of FHCC here. Here is a brief overview given to us by the Daytona Beach News-Journal:
A business group known as the Florida Hurricane Crisis Coalition released a plan Thursday for dealing with the state's property-insurance problems. Lawmakers could consider the plan during a special legislative session that starts Jan. 16. Here are some key recommendations:

· Expand a program that provides inspections and grants to residents who want to fix up their homes to better withstand hurricanes. The coalition calls for spending as much as $500 million a year on the program, with much of the money coming from a tax collected on insurance premiums.

· Give homeowners more choices in their insurance coverage, which could help lower premiums. This would include allowing homeowners to choose between a wide range of deductibles.

· Allow insurance companies to buy more reinsurance from a state fund. Reinsurance is a crucial type of backup coverage that insurers use to help pay claims during hurricanes. Buying reinsurance from the state fund would be cheaper for insurers than buying it on the private market, which could lead to savings being passed on to
consumers.

· Require the state-backed Citizens Property Insurance Corp. to charge "actuarially sound" rates that are designed to cover hurricane losses. Citizens ran up deficits paying claims in 2004 and 2005, which forced property owners throughout the state to help subsidize it.
We will continue to study this issue and report back as news arises.

1 comment:

king said...

Usually for an annual premium, an insurance company agrees to assume the risk associated with a client’s assets. This difficult, yet rewarding industry will probably maintain its current rapid growth.