CONSUMER INSURANCE ALLIANCE -- MORE REFORM NEEDED!

Consumer Insurance Coalition

OPEN LETTER FROM THE

CONSUMER INSURANCE COALITION

March 19, 2007

Florida’s property owners saw a very good bill enacted during the special session, but the work to create effective insurance reform is far from finished. Despite the desperate need for fair property tax reform, we can’t forget that the work on insurance reform is far from completion. The recently filed rate-cuts are much lower than expected, showing the need for stronger legislation.

During the pending legislative session we need bills enacted that will strengthen our goal of feasible insurance premiums and work strongly against attempts to weaken insurance reforms that have already been achieved.

To achieve the desired results to strengthen insurance reforms, we must continue to work toward our goals:

Fair insurance premiums for all consumers;
Reasonable length of time for claim reimbursement;
Building codes that will promote the health, safety and welfare of Florida citizens.

The Consumer Insurance Coalition Opposes

The weakening of building codes.
SB 1870 by Senator Posey which would push back the effective date of statewide building code to June 1st.
The repeal of a 90-day requirement for insurers to pay claims.
A limitation on hurricane mitigation discounts to 25%. State Farm argues that there is no proof that mitigation works. However, the members of the Coalition are convinced that it will help. Examples of good hurricane-proof construction, such as the Broward hurricane-house and real-life experience in the Florida Keys , show that strengthening homes works perfectly.

The Consumer Coalition Strongly Supports

SB 1884 (Senator Bill Posey) -- Allows Consumer Advocate more power to stand up for consumers with stronger investigatory power and more money for staff and resources.
HB 1267 (Rep. Julio Robaina) -- SB 2498 (Senator Rudy Garcia) -- Makes Citizens Property Insurance Corporation competitive with rate filings and standard business practices. Makes it mandatory for the State to take into consideration insurance companies’ national profit levels before allowing any other rate increases.
HB 1307 (Rep. Ron Saunders) – Deletes PUPs, partially eliminates cherry-picking. Makes "File & Use" permanent!

Additional Measures That Must Be Addressed

Make Citizens competitive by selling complete insurance coverage and lines that will help lower rates. Run Citizens like a real business.
Spread the risk by eliminating cherry-picking. Florida 's consumer can't be left holding the bag.
Eliminate Florida-only subsidiaries (PUP companies), that allow insurers to funnel profits to parent companies while shielding ratepayer funded reserves from claims -- allowing rate increases based on erroneous information.
Without prior rate review, no rate savings are guaranteed. “File and use” rate approval locks in the savings to the consumers.
Long-term relief from exorbitant rate hikes for property owners must be competently administered by a powerful Independent Insurance Consumer Advocate, with more authority to investigate consumer complaints, under the auspices of the Public Counsel.
More stringent guidelines must be established to assure that building codes will meet appropriate standards for weather conditions in Florida .
Any insurance companies that cannot abide by the rules must be barred from selling any insurance to Florida citizens.

Because these unsatisfactory situations have occurred so often, it is now necessary to firmly establish guidelines to deal with the problems associated with property insurance.

Consumer awareness is of the utmost importance. Property owners and business owners must be informed and proactive about their options when faced with unreasonable premiums from insurance companies or lack of appropriate claim service.

Without the consumers themselves acting as watchdogs to safeguard this important issue, there will be no hope for a satisfactory resolution of the many problems facing us today.

Florida ’s property owners need to be able to purchase affordable insurance again. Enacting S 1884 (Senator Bill Posey), HB 1267/SB 2498 (Rep. Julio Robaina + Senator Rudy Garcia) and HB 1307 (Rep. Ron Saunders) will together act as another important step towards achieving this goal. Florida’s property owners deserve the help of our legislators to take these necessary steps! Enacting these bills will help to revive our slumping economy!