Bill alters `prompt pay'

Article Courtesy of The Sun Sentinel

By Mark Hollis
Published  March 29, 2007

TALLAHASSEE– A month after Gov. Charlie Crist signed a hurricane insurance law aimed at lowering homeowner rates, the Florida House on Wednesday voted to amend it so insurance companies can take longer to pay some claims.

At the urging of insurance industry lobbyists, the Republican-led House tentatively approved House Bill 7077, which would remove condominium associations and businesses from a provision of the law that requires insurers to pay or deny claims within three months.

That "90-day prompt pay" rule was written into the insurance law in January by legislators who heard from constituents who battled with insurers after their houses, condos and businesses were destroyed or damaged by the dozen hurricanes and tropical storms that raked Florida in 2004-6.

The change to the law would allow insurance companies more than 90 days to settle or reject the claims of any Florida resident or business owner who purchased property insurance through a condo association. The prompt-pay rule would remain in force for owners of single-family dwellings and condo residents who purchased coverage independently.

Several lawmakers, mostly Democrats, attacked the changes as a severe weakening of a pro-consumer law.

"This is not a light or minor or procedural vote," Rep. Jack Seiler, D-Wilton Manors said. "This is a substantive vote that says we listened to the consumers in January, and now it's March, as all we're going to do is listen to big [insurance] companies, and that's not what we should be doing."

Democrats complained the legislation would bar people from suing companies that don't meet the 90-day rule, leaving them to instead pursue remedies through state regulatory agencies, which the critics said is a more arduous procedure.

A final vote by the House on the measure could come as early as today. Similar legislation is being considered in the Senate. Crist, who signed the original law Feb. 27, has yet to make his views known on the bill.

William Stander, assistant vice president and regional manager of the Property Casualty Insurers Association of America, an industry trade group, said the change is needed because it can be difficult for insurers to quickly assess storm-damage claims made for businesses and large condominium complexes.

"Adjusting and paying on a commercial claim is vastly more complex" than a single-family residence, Stander said.

HB 7077 -- Hurricane Preparedness & Insurance -- The UGLY "Glitch" Bill