Next week, Florida lawmakers will try to fix the state’s ailing property insurance market for the second time this year outside of the regular 60-day legislative session.
“I just don’t know if the Legislature will be able to address all of these things in a week like they need to. It’s just so much,” said former Republican Senator Jeff Brandes of St. Petersburg. Brandes was a longtime advocate for property insurance reform before his term expired in November. “That’s the challenge. This patient is very ill and needs multiple surgeries to survive.”
Six property insurers in the state have gone bust so far this year. And more than a few dozen are on the verge of running out of money to pay off their debts, according to the Office of Insurance Regulation. Meanwhile, residents of the state are paying increasing insurance premiums in the event their home is destroyed by a hurricane or other natural disaster.
On Tuesday, Senate Speaker Kathleen Passidomo (R-Naples) and House Speaker Paul Renner (R-Palm Coast) issued a formal proclamation declaring that the Legislature will meet Dec. 12-16, giving assurances of this deter them from canceling their policies.
Renner recently told reporters that whatever lawmakers get in property insurance next week won’t bring rates down for at least a couple of years.
“Once we do everything I expect in this special session, I believe we will see some downward pressure on rates, but don’t expect it to happen overnight.”
The proclamation lists several actions lawmakers plan to consider, including reducing excessive litigation costs, increasing the availability of reinsurance for insurance companies, curbing the growing number of policies from Citizens Property Insurance Corporation, the state-backed insurer of last resort , as well as other regulation changes.
“We’re going to be honestly looking at the kitchen sink for options,” Renner said. He told reporters that ending unilateral attorneys’ fees that insurance companies must pay if they lose a claims battle in court is in the “sink” of things they will consider, although there are no guarantees.
The proclamation doesn’t provide details on how lawmakers plan to reduce the cost of procedures. Legislative leaders say more information is forthcoming about policies they will consider.
Property insurance is not the only issue lawmakers have put on the agenda. Lawmakers will also consider allocating funds for tax breaks and other financial assistance to residents recovering from Hurricanes Ian and Nicole. They will also consider providing additional support to the Department of Emergency Management’s response, recovery and relief efforts following a natural disaster.
Also on the list is a proposal to set up a nationwide toll credit program for frequent commuters.
Minority Democrats say they want a “balanced” approach
The upcoming special legislative session will mark the first time the Legislature will meet under the newly elected Republican supermajority. Democrats now make up less than 30% of the legislature, giving them little, if any, leverage in policy-making.
When it comes to property insurance, non-partisan cooperation seems likely. Rep. Fentrice Driskell (D-Tampa), leader of the House minorities, told reporters during a press briefing Tuesday that the caucus will support policies that benefit consumers and correct the market.
“We want to offer balanced solutions that keep the homeowner safe, but also allow us to have a competitive market so insurance companies can compete,” said Driskell. “They are providing a service that we really need, so what can we do to make corrections in the market to help everyone all around?”
One change the insurance industry is calling for is the end of one-way attorneys’ fees, seen as an incentive to file lawsuits against property insurers.
According to Insurance Information Institute spokesman Mark Friedlander, 116,000 lawsuits were filed against insurers in Florida last year, and 130,000 were planned for this year before Hurricane Ian.
The state has 8% of all insurance claims in the US, but 76% of the country’s lawsuits against insurers.
Republicans may consider ending one-way attorney fees and capping the allocation of benefits, both of which are credited with driving up the number of lawsuits.
Democrats may not be willing to support policies that “go too far on these issues,” Driskell said.
“Those who go too far with legal fees and assignment of benefits run the risk of cutting off consumers’ access to the courts.”
But Democrats want lawmakers to take significant steps to ensure broader availability of reinsurance, which insurance companies rely on to cover losses their policyholders incur after a catastrophic event. “Our caucus believes these changes need to be robust.”
The high cost of reinsurance has driven up costs for insurance companies, which are ultimately passed on to consumers via rate increases.
