Lawmakers near deal on insurance crisis

Article Courtesy of The Miami Herald

Published  January 21, 2007

With time quickly running out, Florida lawmakers have nearly reached a deal on a sweeping insurance bill, including outlining a possible agreement to put the state on the hook for billions in hurricane damages in order to lower insurance rates for homeowners.

But House and Senate negotiators remain at odds on what to do with Citizens Property Insurance, the state-created insurer that covers 1.3 million homeowners across the state. While both sides have agreed to spare Citizens rate payers huge increases that would kick in later this year, there was still no agreement on cutting the rates homeowners pay now.

''We are very close to making meaningful rate reductions a reality,'' said House Speaker Marco Rubio, a Miami Republican. ''I believe the differences that do remain are surmountable.'' In the dizzying array of negotiations on Saturday, both House and Senate negotiators agreed to a myriad of other issues important to both consumers and the insurance industry.

Some consumer friendly proposals were discarded but Rep. Jack Seiler, a Democrat from Wilton Manors, insisted consumers will be happy so long as rates are reduced.

''The consumer's doing great, rates will go down,'' Seiler said. "That's more important to consumers than many of these little issues.''

Yet other lawmakers were convinced the final product will not please the folks back home.

''About close to half the market, we now know, [may not see a cut], I don't see how you can say that's a success. That's a failure for millions of families,'' said Rep. Dan Gelber, a Miami Beach Democrat and House Minority leader.

Some provisions touted earlier in the week by lawmakers were discarded as the session neared its end.

For example, consumer advocates wanted to bar companies from being able to raise their rates and then ask for permission from regulators after the rate hike kicks in. Legislators agreed to halt the practice but only for two years. They also changed for the next two years the process that companies must follow if a rate hike request is turned down by state regulators.

Republicans disputed that they were turning their back on consumer friendly provisions, pointing to other items that had been agreed to by negotiators, such as allowing consumers to purchase insurance without hurricane coverage or insurance for their furnishings.

Lawmakers also on Saturday jettisoned a provision that was championed by Gov. Charlie Crist that would have put limits on the ability of national companies to have spin off companies in Florida, a move designed to protect national companies from having their profits eaten away by losses here.

A few House members protested the move, pointing out it was important to Crist.

''I'm proud of the House's work on this bill, but it's bad public policy'' to allow this Florida-only companies to continue multiplying, said Rep. Julio Robaina, a Miami Republican.

He said he might not be able to vote for the bill without this measure.

But Rep. Don Brown, a DeFuniak Springs Republican, told his fellow members: "The governor doesn't vote on this conference.''

Also thrown out: a plan to require that the profits of insurance companies at the national level to be factored into how much their affiliates can charge in Florida.

Also gone is a provision that would required the existing Florida subsidiaries to disclose their parents' profits in rate filing. That was a big win for the insurance industry.

It appeared late Saturday that lawmakers would allow Citizens to offer additional insurance policies on top of what it already sells homeowners. Citizens' officials have said allowing it to sell a complete policy, not just hurricane coverage in the state's designated windpool area, will allow the insurer to expand its premium base and lower rates by about 10 percent from the 2006 level. But the agreement to let Citizens expand fell apart after House and Senate negotiators failed to agree on a way to cut Citizens rates.

Lawmakers did agree to give Citizens policyholders a rate freeze for one year and to let them dodge two rate hikes: the nearly 56 percent rate increase due in March and the 25 percent rate hike that was due to kick in in January.