SB 1770 retained its number, but it is basically the House version of the bill, HB 909. Days ago the House “amended” the Senate version by replacing it with its own. The Senate got the bill back and passed it, 32-1.

Nevertheless, SB 1770 establishes a clearinghouse aimed at reducing the number of policies at Citizens. The clearinghouse would allow new and renewed policies to be shopped to private insurers before landing at Citizens. A comparative rate analysis would be generated.

“The Legislature has provided a great tool in our effort to return Citizens to its original purpose as the insurer of last resort,” says Citizens CEO Barry Gilway (pictured), in a statement. “Through the clearinghouse, many policyholders will be able to find more comprehensive coverage at a lower price in the private market. That, in turn, reduces the likelihood and amount of assessments on all Florida policyholders face in the event of a major storm.”

The bill also prevents Citizens from insuring homes valued at more than $1 million. That cap gets lowered gradually until it reaches $700,000 in 2017.

Among the bill's highlights is also a provision banning Citizens from insuring new or “substantially improved” homes in areas seaward of the Coastal Construction Control Line after July 1, 2014.

Independent think tank R Street says the provision is based on a proposal it provided. Christian R. Camara, the group's Florida director, calls the bill a “win for Florida taxpayers, consumers, businesses and charities, by moving toward restoring Citizens as a true insurer of last-resort, promoting competition in the state's insurance market, and protection Florida environmentally-sensitive coastal areas.”

However, the bill no longer contains language related to Citizens' rates. The original Senate bill outlined a plan require Citizens' rates to be actuarially sound for new business starting Jan. 1, 2014.

These provisions were removed by the House, and while the G. Donovan Brown, state government relations counsel Property Casualty Insurers Association of America (PCI), commended SB 1770, he recognizes “Much more work needs to be done to address the current exposure and rate inadequacy of Citizens.”

“Citizens remains too large and still exposes Florida policyholders to a hurricane tax,” he adds.

Notes

- Gov. Scott has seven days to review and sign the bill if it lands on his desk before the end of session, May 3. Otherwise, he has 15 days.

- The bill also creates an inspector general to oversee Citizens.

- Another provision omitted from the Senate bill by the House replacement had to do with opening up Citizens to bad-faith litigation.

- The Citizens' board is expanded from eight to nine members—the addition being an advocate for consumers appointed by the governor.

- The Florida Hurricane Catastrophe Fund is renamed the State Board of Administration Finance Corp.