Measure contradicts earlier bill on Citizens

Article Courtesy of The Palm Beach Post

By Michael C. Bender
Published  April 21, 2007


TALLAHASSEE Eight days after voting to expand the state-run insurer, a state House council approved a measure Friday that would shrink it.

The sponsor of the bill, which would return Citizens Property Insurance Corp. to its noncompetitive role in the market, told fellow lawmakers that the bill approved last week as well as changes made during a special session should be only short-term fixes.

"When the storms hit Florida again, our taxpayers are going to be hit with more assessments," said Rep. Alan Hayes, R-Umatilla. "We must have a better plan."

His bill (HB 1223) would create a task force that would dismantle the changes made to Citizens during the special session in January - changes that made the insurer more competitive with private insurers.

Gov. Charlie Crist toured the state touting those changes after the special session, and he made a rare council appearance last week to support a bill (HB 1267), sponsored by Rep. Julio Robaina, R-Miami, that would further expand Citizens' role.

The Jobs & Entrepreneurship Council last week approved the expansion bill 12-2, and Friday approved Hayes' bill 11-0.

The competing bills both need to be approved by one more council before moving to the House floor. But it is unlikely both will make it, lawmakers and lobbyists said.

Insurance lobbyists strongly oppose a provision in the bill Crist supports that would prohibit their companies from creating Florida subsidiaries, known as pup companies. Other provisions in the expansion of Citizens, including freezing rates until 2009 and adding a governor-appointed seat to the corporation's board, were not expected to be as controversial.

If the pups provision is removed from Robaina's bill, lobbyists said, they would not push for Hayes' bill.

The 15-member task force created by Hayes' bill would include nine appointments from the legislature and governor and six from private insurers.

The bill was supported Friday by State Farm, Associated Industries of Florida and the Florida Chamber of Commerce.

"It's critical to not allow Citizens to grow unabated," said Associated Industries President Barney Bishop. "We are violating every basic insurance principle with what was done in the special session. And so this very good bill is absolutely needed."