Senator Garrett Richter, R-Naples, debates a proposal to shrink the size of Citizens Property Insurance Corp. by allowing unregulated surplus lines companies to take over policies. Richter said the amendment amounted to a ñstraight jacketî that would discourage private insurers from coming to Florida. [Scott Keeler, Times]
A proposal to shrink the size of Citizens Property Insurance Corp. by allowing unregulated surplus lines companies to take over policies hit a speed bump Monday, with a Senate amendment intended to make the bill more consumer-friendly.
The amendment, filed by Sen. Thad Altman, R-Melbourne would change the program from an automatic takeover process to one that consumers have to proactively opt-in to coverage-switch.
The controversial bill comes in a year when property insurance reform has played a minor role despite insurance industry cries that a hurricane would cause the state financial chaos.
Bill sponsor Sen. Garrett Richter, R-Naples, said the amendment amounted to a “straight jacket” that would discourage private insurers from coming to Florida.
“They’re not going to come in,” he said. “If they want to take 30,000 policies out, they’ve got to get 30,000 signatures… They’ll just move their capital and go to another state.”
Several South Florida Republicans voted against the House version, and Republicans from the Tampa Bay-area led the charge toward amending the Senate version Monday.
Sen. Mike Fasano, R-New Port Richey, a constant critic of Citizens, has railed against the surplus lines bill because the insurers are not backed up by the Florida Insurance Guaranty Fund and are not regulated by the Office of Insurance Regulation. That means they could raise their rates by any amount and, if they went belly-up, homeowners would be left out to dry.
Those supporting the bill say that several consumer protections—including a $50 million surplus requirement and a solid financial rating—have already been included.
Altman’s amendment was originally killed on a voice vote, but when Senators requested a recount, the vote tally showed a 21-18 split in favor of the amendment.
The bill heads for a full vote on Tuesday, and if it passes the House and Senate versions will have to be ironed out. The House version remains an opt-out process, allowing surplus lines to take over policies automatically after 30 days notice.