Among changes made by the House in passing the bill is removal of language that would have eliminated the limited anti-trust exemption for insurers in the state.
The House amended the bill, known as Senate Bill 2860, and passed it late Wednesday night. The Senate followed suit late Thursday afternoon.
Besides removing the anti-trust language, the legislation would mandate that commercial insurers looking to non-renew more than 10,000 policies in a given year would have to notify the state Office of Insurance Regulation at least 90 days prior to doing so, but would not be required to stagger the non-renewals as was mandated in the original Senate version.
Another major change in the bill involves the setting of harsher fees for violation of state insurance code or laws. The version passed by both the House and the Senate doubles the current fines for both willful and non-willful violations, where the original Senate version created much higher penalties.
State insurance commissioner Kevin McCarty praised the state lawmakers for keeping provisions that enhance his office’s authority.
“I am pleased that some significant consumer safeguards have been maintained in the House version,” of the bill, he said, mentioning specifically the provisions requiring insurers to obtain state approval prior to implementing a rate increase.
For policyholders, the legislation will extend a rate freeze for the state-run Citizens Property Insurance Corp. for a year, and insurers would also be required to pay undisputed claims within 90 days under the bill.
The legislation also includes a provision to shore up the state’s Insurance Capital Build-Up Incentive Program, which was designed to lure new capital to the homeowners market by offering low-interest loans to companies willing to add a matching amount to their surplus. The bill appropriates $250 million for the program, to be taken from Citizens, but requires companies seeking the loans to use a percentage of their capital to take policies out of the state-run insurer’s book.
While many of the provisions of the original Senate bill were softened in the House, insurance industry groups continue to express concern over the final bill.
“While the bill passed by the House is somewhat less punitive toward the insurance industry than the original legislation, it will not lead to a better insurance marketplace for consumers,” said Liz Reynolds, Southeast state affairs manager for the National Association of Mutual Insurance Companies. “In all likelihood, the result will be fewer choices of insurers.”
David Sampson, president of the Property Casualty Insurers Association of America, echoed that sentiment, arguing that even under the legislation, the state would be facing significant liability in the aftermath of a major hurricane.
“Whatever post-storm costs that the state cannot collect in bond revenue, the taxpayers will be on the hook for through assessments on their property and auto insurance bills,” he said. “We increase the chances that the next hurricane will devastate the state’s economy for generations if we ignore risk, drive private insurers out of the state, and place more of the potential costs from a major storm on the backs (and wallets) of Florida consumers.”