Fla. Sees Lack Of Support For Insurers To Take Citizens Customers

April 29--A plan to let insurers with unregulated rates make offers to customers of state-run Citizens Property Insurance Corp. is not likely to reach a final vote because of a lack of support in the Florida House, its top leader says.

A spokesman for Speaker Will Weatherford said Tuesday that he does not intend to take up SB 1672 in its current form as the session winds down.

The Florida Senate, meanwhile, has yet to give final OK to a House-approved version of another bill, SB 542, designed to encourage more private flood insurance.

House leadership is looking dimly on a bill passed by the Senate 22-16 to allow "surplus lines" companies to offer coverage to Citizens customers through a new clearinghouse launched this year. Unlike regular "admitted" carriers whose rates are regulated by the state, such companies are not backed by a state fund to pay claims if they fail and can raise rates at will.

"The speaker acknowledges that admitted carriers and surplus lines are apples and oranges," said Rep. Frank Artiles, R-Miami, an opponent of the move. "And he is correct by not accepting them in the clearinghouse."

Senate insurance chairman David Simmons, R-Maitland, argued homeowners deserve a choice with sufficient consumer protections in place. Past efforts to let surplus lines companies take Citizens customers also ran aground in the House.

Simmons said Tuesday he thinks the plan makes sense but "I realize that some do not believe, in good faith, that consumers can make this decision. As such, I have told House leaders that this is not an essential element of the Senate Bill."

Other parts the bill, if it survives in shorter form, deal with fees and inducements related to property inspections and work by contractors.

Under the version the Senate passed, customers would get an offer from a surplus lines company only if no admitted carriers extended coverage through the clearinghouse. Homeowners could refuse that offer or return to Citizens within 36 months at renewal rates under the bill.

Surplus lines companies, which include names like Lloyd's of London, should remain last-resort carriers covering properties like shopping malls and mansions, not large numbers of ordinary homes, opponents said. If they really want to serve regular homeowners, they can submit to state regulation and participate in a fund that helps cover claims for carriers who go out of business, critics maintained.

Meanwhile, regulators announced Tuesday that Southern Oak Insurance Co. has received permission to take up to 10,000 Citizens customers in July. The customers have a choice to remain with Citizens, which has shrunk from 1.5 million to about 900,000 customers largely through such heavy "takeout" activity.

The transfer offers are continuing even as a clearinghouse launched in January makes some customers ineligible for Citizens if a private insurer is offering comparably priced coverage. Some 10 private insurers are participating in the clearinghouse with more expected to join, a Citizens spokesman said.

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