Insurance lobbyists are hoping to build on the relative success the industry had during the past Florida Legislative session a year ago and continue progress within a property insurance market that experienced many hardships even after another year without a major storm.

"Last year, we saw a change of attitude in lawmakers," said Gary Landry, vice president of the Florida Insurance Council. "They realized the quick fixes over the prior couple of years were not solutions."

One of the first items on the insurance agenda is moving through the legislative process quickly. Ironically, the bill is meant to correct an "unintended consequence" of a far-reaching insurance reform measure passed during the past session, Landry said. HB 1495, among many other things, changed the way insurers purchased reinsurance. In doing so, an accounting problem developed that could have caused a depletion of surplus for some insurance companies, Landry said. A fix is running through the legislative process without complication, he said.

"It's a great relief, particularly to the domestic companies," said Katie Webb, government affairs specialist at Colodny, Fass, Talenfeld, Karlinsky & Abate. The firm is general counsel for the Florida Property & Casualty Association, which represents many of the domestic companies that have grown to become a major portion of the Florida marketplace. "It could have caused a lot of problems for a lot of companies."

Legislators' perspectives were changed in 2009 by constituents who, because of a prior law, got to see all the assessments they were charged directly on insurance bills, Landry said. This year lawmakers are hopefully influenced by reports from state officials -- mainly Insurance Commissioner Kevin McCarty -- that prove "we were not crying wolf," Landry said. McCarty told the Florida Cabinet nearly half of insurers in the Sunshine State were reporting underwriting losses and surplus was dropping (BestWire, Sept. 29, 2009).

However, trade associations may be dealing with insurance fatigue among legislators this session, according to William Stander, regional manager for the Property Casualty Insurers Association of America.

"I think there is definitely an exhaustion factor we're dealing with," Stander said. "There's a balancing act. We try and move the ball downfield to regain operational flexibility for the market -- but not too far to invite a veto."

Gov. Charlie Crist has said he would not be in favor of this year's version of the Consumer Choice Bill. The new deregulation bill, HB 447, would strip regulators of the power to reject residential property insurance rates for all insurers based on excessiveness. The 2009 version of the bill, HB 1171, allowed only large companies to charge what they wanted for homeowners insurance. HB 1171 received support from lawmakers but it was vetoed by Crist.

First, legislators have begun to talk about 2010's omnibus bill, SB 2044. In this measure, "for every insurance provision, there is supposed to be something for the consumer," said Webb. "This has a little bit of everything in it."

SB 2044 proposes that the surplus requirements for insurers be raised to $15 million from $5 million. The measure also includes replacement cost adjustments and a plan that could allow insurers to apply for an increase in base rates if mitigation discounts result in a loss of revenue. An expedited way to recoup reinsurance costs is also within the bill.

Public adjusters could be affected by measures to limit the way they solicit customers. Bills being introduced would also limit the amount of time a homeowner has to file a claim against an insurer to three years instead of five years, which is the current limitation.

The work doesn't stop with the homeowners market. Cecil Pearce, vice president of the American Insurance Association, said the organization is behind a deregulation bill for commercial insurers. AIA helped to craft SB 2176, which would exempt from regulation certain categories of insurance: umbrella, surety and fidelity, commercial automobile, directors and officers and environmental liability.

"We chose to include no catastrophe exposure, no commercial property, in the bill," Pearce said. "This has nothing to do with hurricanes. We want to be able to add insurance capital to a state that says it wants to grow jobs."

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)