BEATRICE E. GARCIA
TALLAHASSEE -- State senators unanimously approved a bill Wednesday that would allow the state-run insurer to expand its operations and freeze its rates through 2008.
These lawmakers -- including the bill's sponsor, Sen. Rudy Garcia of Hialeah -- had been expecting easy passage when the House takes up the measure today.
But with just two days left in the regular session to deal with the state's burgeoning insurance crisis, two proposed last-minute changes to the Senate bill could bog its forward movement with renewed debate about the wisdom of letting Citizens Property Insurance become more competitive.
Also Wednesday, the Senate passed the House version of a bill that expands the state's hurricane mitigation program. Changes made Wednesday to the bill require shutters on homes with an insured value of more than $750,000 and when more than $50,000 of remodeling work is being done. It would also require strengthening roofs with straps or attachments when roof rebuilding is done on homes insured for more than $300,000. This bill now goes to the governor's desk.
On the bill that would expand Citizens, an amendment filed by Rep. Dennis Ross, R-Lakeland, would require Citizens to look to its own policyholders to build adequate surplus and cover any shortfalls if the company ran out of funds to pay claims.
''Citizens should be on an even playing field with other insurers. It should look to its own assets and policyholders,'' said Ross, explaining the rationale behind his proposed change.
Ross and a handful of other representatives have consistently expressed concern about expanding Citizens and letting the company turn to all policyholders -- auto, home and commercial property -- to cover losses for the state company if its reserves aren't sufficient to cover claims if a big storm hits Florida.
Citizens now is the largest insurer of homes, condos and apartments in the state with nearly 1.3 million policies on its books. As a result of a massive insurance bill passed in January during a week-long special session, it will expand its commercial insurance business in September.
Another late amendment proposed by Rep. Alan D. Hays, R-Umtilla, would establish a task force to develop a plan to take Citizens back to its original mission -- a noncompetitive insurer of last resort. Until last year, Citizens had been required by law to charge rates above the 20 largest private insurers. That requirement deterred homeowners from voluntarily choosing Citizens for coverage unless they had no other options.
The bill as approved by the Senate would allow homeowners to choose a Citizens policy if their coverage by a private insurer is at least 15 percent higher than the state-run company. It would continue the rate freeze until 2008. And it would prevent the formation of more Florida-only subsidiaries for the national insurance companies and would require current subsidiaries operating in this state to include their parent companies' profits in rate filings here.
This bill has the backing of Gov. Charlie Crist, who believes that giving Citizens the ability to compete more readily with private insurance firms would eventually lead to lower insurance rates. Crist is betting that private insurers might be inclined to nudge their rates down to keep from losing policyholders to Citizens.
Garcia had been happy with the Citizens bill as it was sent to the House Wednesday afternoon. But he's now worried these amendments "gut the bill.''
''It would continue to help the insurance industry and not the consumers of Florida,'' Garcia said, adding he's not sure the Senate would take up an amended bill after having approved it once.
However, Ross isn't sure he has all the votes to get his amendments adopted by his fellow House members.
''Only two representatives voted against the special session bill. I hope to at least double that number tomorrow,'' said Ross late Wednesday. He was referring to Rep. Don Brown's vote and his own vote against the massive insurance bill passed in January after a week of negotiations.