A Senate committee voted Tuesday to allow private insurers to raise their residential property insurance rates.
The Senate General Government Appropriations Committee unanimously approved a measure by Sen. Mike Bennett, R-Bradenton, to allow certain insurers to raise residential insurance by as much 10 percent and limit the power of the state Office of Insurance Regulation.
It also moved forward a bill from Sen. Garrett Richter, R-Naples, to raise insurers required surplus to as much as $15 million and allow them to pay only as much as half the replacement cost or the actual cash value -- whichever is greater -- of the insured personal property upfront.
SB 876, Bennetts bill, allows insurers meeting certain criteria to raise rates incrementally to 10 percent more than the statewide average. Bennett originally proposed allowing the rates to rise by as much as 15 percent, but he amended the bill Tuesday to lower the cap.
Over time, the rate will go down because were attracting new insurers to the state, Bennett said.
The bill also prevents the Office of Insurance Regulation, which has come into conflict with Bennett over reforms several times in the past, from denying a rate increase because it is excessive or discriminatory for reasons outside of race, color, religion, marital status or sexuality. It also makes changes to how Citizens Property Insurance Corp., the state-run property insurance company, charges its customers.
But private insurers shouldnt celebrate yet.
Gov. Charlie Crist has said repeatedly that he intends to veto any legislation that would raise insurance rates. And the Office of Insurance Regulation is opposed to the bill.
It is our belief, even with this amendment, it still goes too far to the side of business, said Monte Stevens, a representative of OIR.
Stevens was met with cold receptions from the bills supporters.
I appreciate you spouting the party line, said Sen. Carey Baker, chairman of the committee.
Baker told Stevens that OIR had failed to regulate insurance well, and it was time for a change
Most of the other lawmakers on the committee seemed to agree, as they unanimously passed the bill.
David Daniel, vice president of legislative affairs with the Florida Chamber of Commerce, said allowing rates to rise will help insurers stay afloat and give the public a broader choice of companies from which to purchase.
Richters bill faced a rockier course as the committee rushed to approve a passel of bills Tuesday afternoon. The bill raises the surplus requirement for residential property insurers from $5 million to $15 million for new insurers and from $4 million to $5 million for existing insurers, with an increase to $15 million by 2015.
The bill also requires insurers to pay only half the replacement cost or the majority of the actual cash value of insured personal property upfront. The insured will need to submit a receipt to get the rest of the money.
Senate Minority Leader Al Lawson, D-Tallahassee, tried to amend the bill to negate the change, but he and other Democratic lawmakers were voted down.
Contact Alex Tiegen at atiegen@sunshinestatenews.com, or at (561) 329-5389.
