Two key issues remain after
accord reached on Citizens' coverage
Article Courtesy of The Sun Sentinel
Kleindienst, Kathy Bushouse and Mark Hollis
Published January 21, 2007
TALLAHASSEE · House and
Senate negotiators went down to the wire Saturday night, agreeing on one
of three key issues standing in the way of an agreement on compromise
legislation to fix Florida's property insurance crisis.
And with an hour before midnight, they were extremely close to agreement
on the two unresolved issues.
Legislators agreed on a plan to expand homeowner coverage offerings for
state-backed Citizens Property Insurance Corp.'s customers. This opens the
door for Citizens to provide fire and casualty and hurricane coverage
rather than hurricane-only policies, along the state's high-risk
Citizens, the state's largest property insurer, has estimated the ability
to sell full homeowner coverage could cut premiums by up to 10 percent for
"It's providing some relief to some people, but it's still leaving
lots of folks with obscene windstorm rates. There has to be movement to
address Citizens policy holders who simply can't make ends meet,"
said House Democratic Leader Dan Gelber of Miami Beach.
Hours of intense discussion Saturday -- day five of an emergency session
-- still couldn't yield an accord on enlarging the state's Hurricane
Catastrophe Fund to help insurers pay claims after a major storm and
slashing insurance rates for property owners statewide.
Senators have pushed for a larger state catastrophe fund that could
provide more affordable reinsurance to private insurance companies. They
have blamed the high cost of private reinsurance for soaring homeowner
"We want to tell the reinsurers of the world, who have been charging
too much, that there's a new day and the state of Florida is calling their
bluff, and will pass the savings along to the people of Florida,"
Senate Democratic Leader Steve Geller of Hallandale Beach said.
Gov. Charlie Crist has vowed, since the session started Tuesday, to reject
any final legislation that does not significantly lower rates for all
Florida homeowners. His staff prodded lawmakers again Saturday to keep
working toward that end.
Late Saturday, Rep. Ray Sansom, R-Destin, the House's top negotiator,
said, "I think the governor will realize we've been working real hard
to accomplish the goals of all the people of Florida. Hopefully, we've
made some decisions that will reduce rates and stabilize the market."
Whatever issues don't get ironed out by 6 p.m. today will be handed to
House Speaker Marco Rubio, R-Miami, and Senate President Ken Pruitt,
R-Port St. Lucie. Rubio and Pruitt are expected to finalize a compromise
in time for a formal vote by the full House and Senate on Monday, the
final day of the emergency session.
Over the past few days, House and Senate negotiators have gradually
settled dozens of differences in the bills their respective chambers
approved Wednesday. Key among them Saturday was agreement to repeal a
26-percent rate hike, effective Jan. 1, for Citizens' customers, and to
scrap a 56-percent rate hike scheduled to take effect in March.
"We've been able to pare this down a lot further than people thought
we would [Saturday]," Senate Banking and Insurance Chairman Bill
Posey, R-Rockledge, the top Senate negotiator said late Saturday.
While tempers flared sporadically during talks Friday and Saturday, both
House and Senate negotiators have offered concessions during the tedious
process of reviewing each other's bills word-by-word seeking compromise
language to reach a final accord.
House and Senate negotiators struggled Saturday over how to slash
insurance rates that have grown by double and triple digits since eight
storms ravaged the state in 2004 and 2005. Plans under discussion provide
potential savings between 9 and 40 percent for homeowners covered by
private insurance companies and Citizens, which covers 1.3 million
policyholders, half of them in South Florida.
Crist met with Sen. Jeff Atwater, R-North Palm Beach, early Saturday to
discuss strategies to cut rate cuts for Citizens' customers.
"He said, `Just keep fighting for rate relief,'" said Atwater,
who is pushing a plan that would allow Citizens to buy its reinsurance
free from the state catastrophe fund, saving the company millions of
dollars that could lead to premium cuts.
The governor also worked with Democrats to explore how to expand the
catastrophe fund in a way that would reduce rates for all homeowners
"The critical feature is when we leave here our constituents know
what the reduction is," House Democratic Leader Dan Gelber of Miami
No matter what they do, however, many South Florida consumers are already
unhappy with the results.
"Splashing 25-percent rate drops on the front page of the newspaper
is a joke to many homeowners who are either still living under blue tarps,
getting nowhere with insurance adjusters and constantly getting rate
raises two and three fold," said Armando Tony Sarcomo, a resident of
Cypress Bend in Pompano Beach.
Marianne Wilson, a retiree from Wilton Manors, said her annual premium has
jumped 300 percent in two years. To top that, she said she was recently
told that Liberty Mutual, which has insured her home since 1965, would
drop her next year.
"Where do we go from here?" she asked. "To Georgia, as our
son and his family have done?"
Tom Hutchison, who lives west of Boca Raton, said the Legislature might
have tried to do too much in too short of a time.
He would have preferred a rate freeze so his State Farm policy wouldn't
jump from $2,200 to $6,000.
"That in turn would allow me to pay whatever I was paying before and
let them figure this thing out," he said.