Florida’s beleaguered property insurance industry is hoping the second time will be the charm after Gov. Ron DeSantis announced he is working with lawmakers to schedule another special session to stabilize the market.
The governor’s office did not release details or a copy of an executive order convening the session, but at an event in hurricane-devastated southwest Florida, the governor said lawmakers could convene after the Nov. 8 election and before the end of the year for news reports . House and Senate leaders and insurance industry activists said they are ready to address issues facing an insurance industry that has seen six insurers default this year, while others have raised premiums significantly.
“We support that. We’re hoping for more legislative reform, particularly around one-way attorney fees,” said Michael Carlson, lobbyist and president of the Personal Insurance Federation of Florida, which represents a number of insurance companies.
A special session held in May approved two measures aimed at reducing claims litigation, removing plaintiffs’ attorneys’ fees for assignment claims, providing insurers with a layer of state-provided reinsurance and allowing policies to pay only for roof repairs. in many cases not a full replacement.
But insurance executives and advocates have said much more is needed to stabilize a market that seems overwhelmed by litigation and rising reinsurance costs. DeSantis said Thursday he wanted further action in Mayt that the Legislature was unwilling to go along with, according to Politico, a news site.
Several ideas for the upcoming special session were discussed in the industry, including:
- AOBs. Revising state law to allow insurance policies that exclude the assignment of benefit agreements. Florida’s chief financial officer, Jimmy Patronis, proposed an outright ban on AOBs on Wednesday — a day before DeSantis announced the special session schedules. But it wasn’t clear Friday if DeSantis and lawmakers are on board for a special session. It’s also not clear whether such a ban would stand up to judicial scrutiny, Carlson said, since Florida law has long allowed people to contract.
- cat fund. Reducing the deductible or deductible that insured losses in Florida must achieve before insurers can access the Florida Hurricane Catastrophe Fund. The state-created fund provides lower-cost reinsurance after major hurricanes, but earlier access could save some airlines millions of dollars on their reinsurance side, supporters of the idea said. The provision of a further level of state-supported reinsurance at reduced premiums has also been tackled.
- legal fees. At the heart of the Florida insurance crisis, according to many insurers, are Florida statutes, which allow plaintiffs’ attorneys to rake in large fees if they win a lawsuit, even if the fees are much higher than the verdict or settlement. The May special session banned plaintiffs’ attorneys’ fees, but only in AOB cases.
Industry insiders and business leaders have said waiting until the 2023 regular session of the legislature to enact reforms will be too late and would not give insurers relief ahead of next summer’s reinsurance renewal deadlines. Reinsurance prices have skyrocketed this year and are expected to rise again.
Whatever action lawmakers consider to save the property insurance industry, it must be accompanied by some sort of short-term relief for homeowners, many of whom have seen premiums double or triple in the last two years, some insurance advocates say.
Carlson and others have said that Hurricane Ian, which swept across the state on September 28-29, may have provided the final straw needed to prompt state leaders to consider another session and a broader one To take action. Patronis, insurance agents and policyholders have reported that the hard-hit Fort Myers area has been inundated with public surveyors, adverts from plaintiffs’ attorneys and contractors hoping to benefit from homeowners filing insurance claims.
On Thursday, October 20, the Florida Office of Insurance Regulation reported that 564,399 insurance claims were filed related to Hurricane Ian, with estimated insured losses to date totaling more than $6.6 billion.
The call for a special session also came a week after Democratic gubernatorial candidate Charlie blasted Crist DeSantis for not fully addressing the crisis and allowing bonuses to skyrocket.
“No one believes that in his last month in office, Ron will finally do the right thing and fix his broken insurance market,” Crist said in a press release, according to Politico.
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