Insurance deal nears
Two key issues remain after accord reached on Citizens' coverage

Article Courtesy of The Sun Sentinel

By Linda 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 coastline.

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 all customers.

"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 premiums statewide.

"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 statewide.

"The critical feature is when we leave here our constituents know what the reduction is," House Democratic Leader Dan Gelber of Miami Beach said.

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.