Florida Senate President Mike Haridopolos opened the 2011 State Legislative Session late last week, beginning a new round in the reform fight for the insurance industry.
From sinkhole claims and reinsurance to the state's last-resort insurer and auto-insurance fraud, there are at least a half-dozen bills the insurance industry is watching closely.
The measure gaining the most attention is SB 408, this year's omnibus property insurance reform bill that addresses many of the same issues contained in last year's SB 2044—a bill vetoed by former Gov. Charlie Crist despite widespread support among lawmakers, regulators, trade groups and consumer advocates.
Provisions within SB 408 gaining the most attention center on sinkhole claims—an issue that was left out of SB 2044 in hopes that passage would be more likely.
Sinkhole claims have become a huge problem for property insurers in Florida, and studies by the Office of Insurance Regulation (OIR) and the Senate Banking and Insurance Committee have backed up insurers' claims that the issue is worsening.
According to the Florida Insurance Council (FIC), which supports SB 408, the bill also requires insurers to carry more surplus, modifies replacement-cost methodology, limits the time a claim can be filed after a hurricane to three years, reforms mitigation discounts and sets new rules for public adjusters (who worked with lawmakers on the language in the bill but who remain concerned about the sinkhole provisions).
It looks as though lawmakers will also decide on a bill designed to restore Citizens Property Insurance Corp. as the true insurer of last resort in the state. Citizens has become the state's largest property insurer, but SB 1714 looks to adjust caps on gradual rate increases outlined in legislation adopted two years ago.
The proposed bill could increase the cap on Citizens' rate increases per policyholder to 15 percent from 10 percent and repeal a law allowing a policyholder to veto "takeouts" that have been negotiated by the OIR. Certain companies in Florida are authorized as "takeout companies" and are permitted to select policies from Citizens—but policyholders have the right to refuse.
FIC said another bill is being drafted to tackle auto insurance fraud due to people taking advantage of the state's personal injury protection (PIP) system.
The Sunshine Alliance to Erase Fraud is working on a bill to introduce during the legislative session. The group was started by FIC, Consumer Federation of the Southeast and the Coalition Against Insurance Fraud.
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