Florida lawmakers leave lots of unfinished business on property insurance reforms [Orlando Sentinel]

TALLAHASSEE — The Florida Legislature sped through its three-day special session on property insurance this week, trying to tackle one of the state’s thorniest problems that has been decades in the making.

There was a sense of urgency to get something done to try to stabilize the insurance market with hurricane season starting next week on June 1.

But lawmakers headed home for the Memorial Day weekend with lots of work undone, setting the stage for another round of reforms when the Legislature reconvenes for its next regular session next year. Or sooner if necessary.

“Mark my words, we will be back,” said Rep. Andrew Learned, D-Brandon.

For starters, they’ll have to reckon with why they didn’t provide any immediate relief for policyholders from skyrocketing premiums and canceled policies, and why that relief might not appear for 12 to 18 months.

“We were all hungry with something to be done, and for the most part it passed with bipartisan support, but we also had a number of amendments to make the bill better … and it’s a shame that none of those were accepted,” said Rep. Fentrice Driskell, an attorney from Tampa and the incoming leader of the Democratic caucus.

Those amendments were aimed at protecting consumer rights to pursue litigation, preserving higher lawyer fees for extraordinary cases, factoring climate change into rates, and guaranteeing a 5% rate reduction, among other things.

Had it been a regular 60-day session there would have been more committee hearings and more opportunities to have a chance to influence the process, she said.

Republicans who authored and championed the bill admitted it was a good start and a “first step” toward stabilizing a market that some characterized as battered by a record number of lawsuits, years of catastrophic storms, rising home replacement costs and bad actors on both the contractor and insurance side.

“We’re going to have to take this thing in a progressive step process,” said Rep. Jim Mooney, R-Islamorada. “There is no perfect bill, but this bill is better than doing nothing.”

Stabilizing the market will allow the Legislature to move forward and discuss other issues, like the ones proposed in amendments offered by Democrats, he said.

But Rep. Michelle Rayner, D-St. Petersburg, said she felt like “this tips the scales in favor of the insurance industry and away from the homeowner.”

Needed more time

The Legislature “needed longer than 2-3 days to work on this bill, and a decision was made without going through the committee process and we have not taken into account the consumers,” Rayner said.

The biggest thing the bill doesn’t do is provide immediate relief to property owners, which Driskell and her colleagues will have to explain to their constituents, who “will want to know what we did on property insurance to lower their rates and bring them relief now.”

While the bill does some good, she said, “It is incomplete as far as full solutions that were needed.”

The reforms that were passed seemed geared at helping the insurance industry, Democrats said.

Rep. Mike Grieco, D-Miami Beach, called a $2 billion, taxpayer-backed reimbursement fund for companies saddled with huge hurricane losses a prime example of corporate welfare. He proposed an amendment that would have required all insurers taking advantage of it to immediately reduce premiums by 5%, but it failed.

“This is market manipulation,” Grieco said. “Floridians were crying for relief, the only people that got relief were insurance companies.”

A proposal by Sen. Lauren Book, D-Plantation, to freeze rates for one year beginning June 30 was rejected in committee and by the full Senate.

The bill also contains additional roofing deductible options, and limits on how much lawyers can charge for representing homeowners in claims disputes – changes that could take 12 to 18 months to be realized as premium savings.

And it forbids insurance companies from refusing to issue or renew policies on homes with roofs less than 15 years old, or from canceling policies on older roofs that an inspector can show still has years of life in it.

Supporters of the bill, which was passed out of the Senate and House with bipartisan support despite all the criticism from Democrats, admitted it wasn’t perfect and didn’t solve all the problems but was a step in the right direction.

The insurance has seen $3 billion in financial losses over two years, huge increases in their reinsurance rates, and at least nine companies going out of business.

Industry experts, many Republicans and some Democrats blame a lot of that damage on unnecessary, and possibly fraudulent, lawsuits. Other factors include the increase in catastrophic storms, rising cost of replacement materials, and the unregulated reinsurance market where insurance companies buy insurance against catastrophic claims.

Policyholders meanwhile have seen double-digit rate increases, policies canceled and rising replacement costs.

But what the bill doesn’t address is a long grocery list, as exemplified by the dozens of amendments Democrats tried to add on during the truncated session.

Climate change not included

An amendment to include climate change by Rep. Anna Eskamani, D-Orlando, was rejected. It happened even though many major insurance companies are factoring it in their business models and even their decisions about whether they want to enter a market where natural disasters are increasing in frequency and intensity.

Sen. Lauren Book, D-Plantation and Rep. Robin Bartleman, D-Weston, offered a plan that would have expanded homeowner eligibility in the state-backed, taxpayer-subsidized Citizens Property Insurance Corporation, but those were rejected, too.

Leaders of the Republican-controlled Legislature are concerned that Citizens is growing too fast, nearly doubling to over 850,000 in two years, and could go under with the next big storm.

Several amendments were offered to hold insurance companies accountable for acting in bad faith by delaying payments or refusing payments on claims, but those were rejected, too, as were proposals to hold the Office of Insurance Regulation more accountable.

Those seeking stronger reforms were also disappointed. Sen. Jeff Brandes said the bill didn’t go far enough in eliminating automatic awarding of fees to lawyers, assignment of insurance benefits to contractors, and other efforts to cut down the number of lawsuits being filed each year, predicting the Legislature would be back again sooner than later to address those issues.

“This is how things work in a special session, with such a shortened period of time to discuss and get questions answered,” Sen. Linda Stewart, D-Orlando, said.

Stewart said she hoped that lawmakers would work over the summer to “fill in the gaps and give the insured a better idea when they might see savings to themselves.”

She’d also like to bring the mortgage companies, insurance companies and others with a stake in the industry to flush out all their issues, then take the amendments that were not approved, vet them and bring them up during the regular session.

“We have to look at what people have suggested to help constituents with the cost of insurance,” Stewart said. “But right now what we have here is the beginning of stabilization.”