The Property Bill: A Primer

After the passage of the homeowners’ insurance bill in the legislative special session held earlier this year, the prevailing hope among insurers was that lawmakers would leave well enough alone by refraining from enacting more reforms in the regular session. That hope, however, was quickly swept away as Governor Charlie Crist indicated he would not relent on placing more pressure on private insurers. Consequently, insurers once again faced a hostile legislature that was eager to follow Crist’s lead and enacting a second round of reforms. The resulting 91-page bill swept through the insurance code with all the fury of a major storm that left insurance representatives stunned and some legislator’s in disbelief. Representative Dennis Ross (R-Lakeland) said the bill was “as close to a socialist policy that we ever came to.” He was joined by Representative Don Brown (R-De Funiak Springs) who decried the changes to Citizens Property Insurance Corporation, which makes it certain the former residual market will be the state’s largest insurer. Speaking of the freeze of Citizens’ rates until January 1, 2009, Brown noted that the bill ensured that homeowners would be eventually face potentially crippling assessments. “A one-year rate freeze is playing Russian roulette and every year you continue the freeze you’re adding another bullet to the chamber,” he said.

As for insurer representatives, there was little they could do but stand back and issue warnings. “On property issues, the governor, once again, got everything he wanted, which takes the state one step closer to a financial disaster,” said William Stander, representing the Property Casualty Insurers Association of America. “There are serious consequences to this quick-fix approach to the state’s property insurance crisis. The larger Citizens becomes with rates that bear no relation to the risk, the greater the financial crisis that could occur when a major storm hits. This is the message we have provided to lawmakers.”