Editorial | Florida insurance agents want to sell license plates. It’s a bad idea

In this 60-day session, seemingly out of nowhere, a bill arrived that would allow large insurance agencies in Florida to sell license plates and issue registrations to car owners, likely at fees higher than the state itself charges. The bill (HB 817) requires elected county tax collectors to appoint a qualified insurance company to offer this lucrative work — at a profit for the insurance agencies but at a hefty cost to Florida taxpayers.

The state Department of Highway Safety and Motor Vehicles has not endorsed this idea. But the agency told the Legislature that the first-year start-up costs alone would be nearly $13 million to provide the necessary equipment. The agency has said nothing publicly, but this hefty price tag, known as a fiscal note, is its way of generating opposition.

Who’s pushing this? No one is saying publicly. But you can bet it’s a Florida-based company that sees a way to increase customer traffic with a new revenue stream. All it takes is a favor from Tallahassee politicians.

Who benefits? A mystery

The bill language says it specifically applies to a “general lines insurance agency.” In hushed tones, legislators and tax collectors speculate that a beneficiary could be Broward-based Pearl Holding Group, a managing general agent for two companies that sell car insurance.

Pearl Holding Group has contributed $453,000 to candidates and political committees in Florida, nearly all to Republicans, including, for example, $12,500 to a committee controlled by Rep. Bob Rommel, R-Naples, chairman of the House Commerce Committee. Another $5,000 went to a committee tied to Rep. Daniel Perez, R-Miami, the incoming House speaker.

The bill restricts the tag-issuance program to companies that produced more than $500 million in policy premiums in each of the past two years.

Pearl Holding Group did not respond to an email request for comment. One of Pearl’s five registered lobbyists in Tallahassee said the company is not lobbying for the bill.

A mystery deepens

The sponsor of the bill, Rep. Wyman Duggan, R-Jacksonville, was not much help. He told reporters he filed the bill as a favor to another lawmaker, because House members can file only seven bills. But he won’t say who.

“We’re just trying to increase customer service,” Duggan said at a meeting of the House Insurance and Banking Subcommittee on Jan. 11.

The panel’s ranking Democrat, Rep. Christine Hunschofsky of Parkland, was rightly skeptical of this whole idea. Two other Democrats, Reps. Marie Woodson of Hollywood and Kelly Skidmore of Boca Raton, joined her in voting no. But every Republican voted yes, most not bothering to ask any relevant questions, and the bill passed, 15-3.

If this bill passes, drivers would have the option of buying plates from an insurance agency, but it’s not required.

Motorists already have multiple ways to buy plates. Besides the tax collector, privately run issuers known as LPAs or license plate agents are in 16 counties and are most visible in Broward and Miami-Dade. Car dealers can issue registrations, too.

Livid tax collectors

Two ex-legislators who are now elected tax collectors, Republican Mike Fasano in Pasco County and Democrat Anne Gannon in Palm Beach County, strongly oppose HB 817.

Both served for many years in the Legislature, and they know how the system works. Having studied the bill, they can see that it will be the tax collectors’ duty to train insurance company employees and to help process paperwork and be sure it’s filed correctly in the state vehicle registration database, known as the Florida Real Time Vehicle Information System or FRVIS.

The bill says insurance company workers “must” have access to the system.

The state audited FRVIS in 2014, and raised concerns that too many people had access privileges to the electronic system that were “not necessary.” As the report said: “These conditions increase the risk of errors, fraud, misuse or other unauthorized modification of FRVIS data.”  At the hearing on Jan. 11, no one raised the risk of giving so many private employees access to such sensitive data.

We urge legislators to raise smart, pointed questions about this suspect proposal, starting with the fact there’s no problem that needs fixing. Chuck Perdue, tax collector in Bay County and president of the Florida Tax Collectors Association, predicts problems if the bill passes.

“HB 817 undermines our ability to continue to serve our customers and will drive up the cost to the consumer,” Perdue told the Sun Sentinel Editorial Board. “Under this bill, costs will go up, transparency will go down and we will have no ability to control the good companies who want to offer this service from the bad companies.”

If the state is so concerned about customer service, it would reduce the unconscionably long lines at state-run driver’s license offices in Pembroke Pines, Lauderdale Lakes and other cities, where motorists camp out in parking lots overnight to be first in line in the morning.

But this bill isn’t about customer service. It’s about doing favors for a well-connected special interest, and it’s one special interest carve-out that Florida can live without.

The Orlando Sentinel Editorial Board includes Editor-in-Chief Julie Anderson, Opinion Editor Krys Fluker and Viewpoints Editor Jay Reddick. The Sun Sentinel Editorial Board consists of Editorial Page Editor Steve Bousquet, Deputy Editorial Page Editor Dan Sweeney, editorial writer Martin Dyckman and Anderson. Send letters to [email protected].

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