TALLAHASSEE — Pushed by a new governor who promised lower insurance rates, lawmakers Sunday reached a deal they said does exactly that: at least 25 percent for customers of private insurers in their windstorm premiums, and 5 percent to 20 percent for those of state-run Citizens Property Insurance Corp.
"This had the ability to bring Florida's economy to its knees," said Senate President Ken Pruitt, praising the group of two dozen senators and House members who worked through the weekend.
The compromise bill, which was still being drafted late Sunday for distribution today, includes dozens of provisions. Key among them are clauses that would:
• Provide as much as $19 billion more in state-sponsored reinsurance, with private insurers who take advantage of the programs having to pass all savings to their policyholders.
• Rescind Citizens' 20 percent rate increase of Jan. 1 and cancel a 56 percent hike planned for March 1 for policyholders in the high-risk area, which in Palm Beach and St. Lucie counties is east of Interstate 95.
• Remove the current requirement that Citizens offer the most expensive policies in the market.
• Allow Citizens to write fire, theft and other coverage for policyholders in the high-risk area, which it currently cannot do for homeowners who are able to find a "multiperil" policy from a private insurer, provided Citizens can produce a "business plan" that wins the approval of the governor, Cabinet and legislative leaders.
• Require that insurers who write property policies in other states but not in Florida also write property in this state or lose the ability to write the more lucrative auto insurance in Florida.
Republican Gov. Charlie Crist, who criticized the insurance industry both before and after winning election in November, praised the agreement and said he looked forward to reviewing it.
In the legislation, Crist will get some of the high-priority items he pushed for, but not all. He had asked for language prohibiting national insurers from using Florida-only subsidiaries for setting rates as well as a "cherry-picking" prohibition dealing with insurers who want to write auto insurance but not property insurance here. He got the second item but not the first.
He had called for Citizens to be able to directly compete with private insurers statewide, but was able to get that possibility only in the high-risk coastal areas where private insurers refuse to write windstorm policies.
And Crist also seemed to back away from his stated priority last week calling for the "greater of 25 percent uniform or 40 percent windstorm rate reduction."
Instead, he fell back Sunday on his more general requirement - that "there must be meaningful, lower rates across the board" - but declined to put a numerical value on "meaningful."
"Let's see what the night holds and what we get by morning," he said about two hours before House and Senate leaders announced their agreement at 6 p.m.
Those legislative leaders also had to back away from the dramatic cuts they were boasting about last week. When the House passed its bill, leaders said their plan would cut average windstorm premiums by 65 percent. Senators said their version would slash windstorm rates in half.
On Sunday, members of both chambers said the reduction for private insurers would be at least 25 percent for the windstorm portion of the policies. Senate Democratic leader Steve Geller of Hallandale Beach, a key player in the special session, said the savings could reach 50 percent for most companies and average 19 percent for State Farm customers.
Exact savings would depend on the location, house and company, lawmakers said. "The success of this bill will be determined on a policy-by-policy basis," said House Democratic leader Dan Gelber of Miami Beach.
The major snag over the weekend proved to be how lawmakers could provide savings for the 1.3 million policyholders of Citizens, including 400,000 policies in the high-risk coastal areas that are also some of the state's most populous.
In the end, lawmakers said that eliminating a requirement for extra payments to the state-run catastrophe fund, broadening Citizens' assessment base to other policies beyond property insurance and some other minor tweaks would produce a cumulative savings of about 10 percent in Citizens windstorm rates.
The 350,000 affected customers who took advantage of the "multiperil" policies that Citizens should soon be able to offer would get as much as another 10 percent, lawmakers said.
The deal reached Sunday represents a dramatic course change from the insurance law passed last year under Republican Gov. Jeb Bush and many of the same GOP leaders. Then, legislators said rates had to rise to bring private insurers back into the market.
Crist's new direction on the issue as well as constituent pressure on legislators - seven House Republican seats changed hands in the election - heralded a new tone.
Sen. Bill Posey, R-Rockledge, chairman of the Senate Banking and Insurance Committee, said he is "a free-enterprise guy" but that the free market was not working.
"The voluntary market has been AWOL for many of the people in this state, or we wouldn't have a Citizens," he said. "If the voluntary market finds its way to again become available and affordable to the people of this state, nothing will please me more than to see Citizens no longer needed."
Gelber acknowledged that the changes also depend on the state avoiding a major hurricane in the coming year. "The problem is, if we have a hurricane, it's going to take the house of cards down," he said.
The weekend negotiators are set to sign off on the final bill this morning, with both chambers scheduled to debate and vote on it this afternoon. The seven-day special session is set to end at midnight, but if problems arise, it could be extended.
Crist said he is optimistic he will like what is sent to his desk, but that if he does not, legislators could always be brought back for another try.