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Opponents of a sweeping overhaul of the law governing Citizens Property Insurance Corp. were in the Capitol on Monday visiting lawmakers, trying to sway enough to reject the measure before it comes up for a final floor vote on Tuesday.
Representatives of a trio of consumer advocacy groups – Hernando County-based Good Foundation Florida, the Florida Association for Insurance Reform, and Policyholders of Florida – say there are parts of the bill (SB 1770) they support. But they claim the overall product will harm new homeowners and the state’s struggling real estate market by hiking rates in some areas as much as 90 percent.
“The final product is very damaging and unnecessary,” said Jay Neal, executive director of the Florida Association of Insurance Reform. “The market in Florida has actually started to recover. We have private risk capitol starting to come in. We had the first ever wind-only take out by a private company.”
Meanwhile, advocates for the changes at Citizens, including the Florida Chamber of Commerce, are equally pressing for the changes they say are needed to reduce the fiscal burden already heaped on the backs of property owners insured by the private market.
“It’s not fair to the 77 percent of us who are paying actuarially sound rates in the private sector to subsidize the 23 percent that have their house insurance through Citizens, it’s an unsustainable model,” said David Hart, executive vice president of the Florida Chamber.
Both sides expect a close vote.
If approved, the measure would still need House passage.
Among a number of changes, the bill would require new Citizens policy holders to pay actuarially sound figures based upon rates offered locally by private firms.
The measure also would create a computerized clearinghouse to determine if private firms are available. Other changes would include the creation of a new inspector general at Citizens, change the way the company’s executive director is chosen. By Jan. 1, 2019 no new policies will be written for residential property worth more than $500,000.
The clearinghouse would be expected to allow private companies to acquire about 217,000 of the 1.3 million Citizens policies.
Consumer advocacy groups are stridently opposed to the part of the proposal that would establish differing rates for current and new policy holders, and another that would make the president of Citizens an appointee of Florida’s governor and CFO with the title executive director.
“We’d have a political appointee setting rates that the Office (of Insurance Regulation) has very little oversight over,” Neal said.
The critics, including some legislators, claim there isn’t a need to rush the changes as there are enough reserves within Citizens to sustain the impact of a Hurricane Andrew-sized storm.
But Hart said the state can’t continue to base fiscal planning on the hope Florida can avoid another hurricane season without the direct hit from a major storm.
“We’ve been lucky for six or seven years, it’s not a matter of if we get hit again, it’s a matter of when we get hit again,” Hart said.
by Jim Turner
