The expiration date on the 2011 legislative session is more than a week over the limit, but the insurance industry and consumer advocacy groups are not done fighting yet.
The groups are battling over SB 408, the one piece of substantive legislation that made it to Gov. Rick Scotts desk this year, despite massive, veto-proof Republican majorities in both chambers dedicated to pro-business policies that included reforming the private insurance market.
Last week Sen. Mike Fasano, R-New Port Richey, who was largely responsible for halting the more aggressive insurance reform measures, sent out a press release urging his constituents to call Scott and ask him to veto the bill.
SB 408 is largely a rewrite of 2010s SB 2044, which was vetoed by then-Gov. Charlie Crist, but the new version includes provisions to rein in rampant sinkhole claims that have spiked in recent years and are at the heart of private insurers' rate increase requests.
In his release, Fasano contended that provisions in the bill allowing for insurance companies to recuperate reinsurance costs, virtually guarantees a 15 percent premium reinsurance increase. He called the rate hike a backdoor tax and fee increase.
Sen. Garrett Richter, the bills sponsor, quickly hit back, alleging that Fasanos claim on reinsurance increases was a false statement.
I cannot simply watch from the sidelines as a 17-year career politician mischaracterizes and demonizes badly needed public policy reform, Richter said.
The bill, Richter noted, simply allows for a maximum 15 percent rate increase related to reinsurance costs, to be reviewed and subject to the approval of the Office of Insurance Regulation. Reinsurance, or the insurance that companies buy in order to be able to pay out claims if their reserves are tapped out in the event of a catastrophic natural disaster, is only one factor in a companys overall rate increase request.
For his part, Fasano called Richter a dear friend and shrugged off being called a career politician.
Ive been called worse, he said.
Property insurers responded quickly, calling Fasanos call for a veto a crusade.
Calling on the governor to veto this bill may make a good sound bite, but its not a sound decision, and it does nothing to move Florida forward or protect homeowners, said William Stander, assistant vice president of the Property Casualty Insurers Association of America.
Consumer advocates joined the fray Monday on Fasanos side, bemoaning SB 408s other measures that reduce the period customers have to file claims from five years to three years for hurricane damage. Sinkhole victims have two years to file. The bill also allows insurers to offer cheaper policies that let them withhold payment of a claim until a homeowner contracts to get repairs made.
I commend Senator Fasano for standing up for consumers and join in his call for Governor Scott to veto SB 408, a bill guaranteed to raise insurance rates in Florida and make it harder for Floridians to file claims, said Sean Shaw, founder of Policyholders of Florida, a consumer advocacy group for the private insurance market.
The chances of a veto from Scott, however, appear slim. He has stated consistently his desire to get the insurance industry more in line with free-market principles by ushering customers out of state-run Citizens Property Insurance Corp. Richter said the bill will do just that.
Were still looking at the details of that bill. Were still looking at the specific language, but on general principle, we support it, said Scott spokesperson Lane Wright.
Yet Fasano, who helped kill bills that would have prevented Citizens from insuring expensive properties and allowed for annual rate hikes for Citizens' customers greater than the 10 percent maximum allowed under current law, is still holding out hope for a veto.
I hope the governor understands -- and I believe he will once he looks at the bill further -- that this is no different than a tax increase or a fee increase, Fasano said.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859 begin_of_the_skype_highlighting (850) 727-0859 end_of_the_skype_highlighting.
