By BEATRICE E. GARCIA
Published May 1, 2008
TALLAHASSEE -- A broad insurance bill that freezes rates charged by the state-run insurer and increases regulators' power to police insurance companies passed the state House of Representatives unanimously at 11:31 p.m. Wednesday.
The bill is the product of two weeks of negotiations with Senate leaders that intensified in the last three days, said Sen. Jeff Atwater of North Palm Beach, who helped draft the initial bill.
''We will accept their amendments and the bill will not be going back to the House,'' Atwater said after Wednesday's House vote.
Indeed, time is running out quickly on this year's legislative session, which ends at midnight Friday.
The measure that emerged from the House moderates rate changes for Citizens Property Insurance and takes the sting out of the stiff fines the Senate would have imposed on insurers if they violated state insurance regulations.
But overall, it's a bill that the insurance industry doesn't like.
''It's anti-competitive,'' said Mark Delegal, a Tallahassee lobbyist for State Farm. The increased regulation and higher fines ''are going in the wrong direction'' if Florida would like to attract more insurance companies to do business here.
In the end, consumer protections and changes for Citizens dominate the bill.
Citizens' current rate freeze will be extended through 2009. The freeze was set to end Dec. 31.
On the floor, Rep. Dan Gelber, the Democratic minority leader from Miami Beach, and Priscilla Taylor, a Democrat from Palm Beach, argued to have a longer, two-year freeze on rates.
Lawmakers acknowledged that they will be back next year with additional fixes for this bill and the state's insurance code.
The House Republicans argued for the need to encourage private carriers to write more business in Florida and to keep insurance affordable.
Rep. Dennis Ross, R-Lakeland, who helped craft the House insurance bill, said he considered some measures such as extending the Citizens' rate freeze and allowing the company to keep writing coverage for highly valued homes as bad public policy. But he realized they were needed, at least temporarily, to ensure the return of a viable market.
''This is akin to someone who has been addicted to drugs and now must go through a methadone program. You can't go cold turkey,'' Ross said.
One provision taken out of the bill was the gradual increase in Citizens rates. The Senate and House Democrats wanted to limit increases to an average of 10 percent in each of the three years after the freeze is lifted.
The revised bill will require Citizens to file actuarially sound rates. That means rates should be set high enough for Citizens to take in enough money to cover future claims -- portending possible significant increases for Citizens policyholders.
Citizens is still expected to provide $250 million to fund an extension of the state's capital incentive buildup program, which provides surplus notes to young and start-up insurers.
However, Gov. Charlie Crist reportedly doesn't favor the notion of using Citizens' reserves to fund this program because it's money that the insurer won't have available to pay claims.
Crist could veto this item, which must be included in the general appropriations bill.