A bill that would allow Citizens Property Insurance to expand further and solidify its tax-exempt status moved forward Monday with full approval from the Senate Banking and Insurance Committee.
The bill got a big push from Gov. Charlie Crist, who made a surprise appearance in the last minutes of the committee meeting to lobby for the bill, which was originally proposed by Sen. Rudy Garcia, a Hialeah Republican.
''It does turn things on its head, and that's the whole idea. It gives more power back to the people for them to have the opportunity for Citizens, and other competition, as a result of this good legislation to be able to get lower rates,'' said Crist.
The Garcia bill was modified to allow homeowners to opt for coverage from the state-run insurer if they have an offer from a private insurer that's 15 percent higher than the premium charged by Citizens.
In the insurance bill passed in January, the threshold was set at 25 percent. Senate bill 2498 initially would have allowed any homeowner to stay with Citizens regardless of the rate offered by a private market insurance company.
Rep. Julio Robaina, R-Miami, has sponsored an identical bill in the House, but it hasn't been scheduled for a hearing as of late last week.
Of course, the idea of expanding and possibly competing head on with private insurers doesn't sit well with the insurance industry. The worry is that all Florida residents would be hit with large future assessments to make up for a shortfall in Citizens if a massive storm hits an area of the state where the company has a large concentration of policies.
William Stander, assistant vice president and regional manager for the Property Casualty Insurers Association of America, also questioned the wisdom of allowing homeowners who could buy insurance in the private market to stay with Citizens if its rates were lower. "We could be subsidizing homeowners who could afford to pay higher rates.''
Another bill approved by Senate committee made a few changes in the state's My Safe Florida Home program that was started last year to provide grants to homeowners to harden their homes.
The Senate bill, sponsored by Sen. Bill Posey of Rockledge, modifies the current program by lowering the value of the homes available for grants to $300,000 from $500,000. It also puts the emphasis on providing shutters for homes, rather than roof repairs and renovations.
In order to provide more grants, the grant amount also would be reduced to $2,500 with a matching grant from the homeowners. It now stands at $5,000.
''We have a perfect storm set up for the economic future of this state if we don't beat the next eight storms to their destinations,'' said Posey, noting that making homes and businesses stronger against future storms was the only way to lower insured losses down the road.
Another insurance bill passed by the Senate committee attempts to fix a few so-called ''glitches'' in the special-session bill.
It supports Citizens' tax-exempt status by clearly stating that the insurer wasn't a private insurance company.
Among its provisions, the bill would prohibit insurers from using the state's provision that allows them to begin using new, possibly higher rates first, and it requires them to first file the paperwork for the needed regulatory approvals on any rate filings done after Jan. 27 and through Dec. 31, 2008.
It also reiterated the 90-day requirement for insurers to settle claims from residential homeowners, including condo-unit owners.