Senate passes Citizens rate freeze


Article Courtesy of The Palm Beach Post

By Kristi E. Swartz

Published  May 3, 2007

 

TALLAHASSEE The Florida Senate agreed unanimously Wednesday to freeze Citizens Property Insurance Corp. rates through 2009 and require certain homeowners to put shutters on their windows if they want to remain covered by the state-run insurer.

Consumers also would be able to remain under Citizens if competitors' rates are 15 percent higher.

The Citizens bill (SB 2498), the first of two the Senate voted on Wednesday, now heads to the House. A similar proposal there would cap rates only through 2008 and let Floridians choose Citizens if another insurer's rates are 25 percent higher.

The proposals are part of an effort by GOP Gov. Charlie Crist to strengthen Citizens.

"I wish we could go further, but this is as far as I can go this year," said Sen. Rudy Garcia, R-Hialeah, the bill's sponsor. "To pass this bill off of this floor today was a very difficult challenge. I hope the House will take it up and give breaks to consumers that they deserve."

Garcia also said he hopes that Citizens, the state's insurer of last resort, eventually will be able to write other lines of insurance that are profitable.

The Senate proposal includes a requirement that the parent companies of Florida-owned insurance subsidiaries - known as "pups" - report their profits. Garcia said he is unsure whether the House would continue to include that in its version of the bill.

Also Wednesday, the Senate agreed to make people in wind-borne debris areas with houses insured at $750,000 or more buy hurricane shutters or impact-resistant glass if they are making at least $50,000 worth of improvements. The amendment was part of a hurricane-mitigation bill (HB 7057, SB 1864) that would help some homeowners pay for shutters.

The Senate gutted the bill during debate Monday, removing a measure that would have required homeowners with homes insured at $300,000 more buy shutters. Increasing that amount to $750,000 drew ire from some lawmakers Wednesday.

"We're mandating something on those who are forced into Citizens," Fasano said.

Clearly frustrated bill sponsor Sen. Bill Posey, R-Rockledge, said the state's insurance crisis would just get worse if people didn't do more to secure their homes.

"We're doing everything we can, some of us, to stop from being prepared, and there will be a day of reckoning," Posey said. "These companies are pulling out of the state because they don't have enough reserves. And we don't have a pittance of reserves. We have a credit card, that's our reserves."

The bill now goes back to the House.


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