Florida lawmakers are trying again on Citizen’s property insurance reforms after Gov. Rick Scott vetoed last year’s proposal. The changes would put new restrictions on private companies taking policies out of the state’s insurer of last resort.
Florida’s state-backed property insurance company—Citizens—has been around since 2002. But it was a rash of hurricanes in 2004 that really forced the organization to step into the breech as major insurers abandoned Florida policies as too risky.
“Last year this Legislature unanimously passed a bill with regard specifically to the issue of Citizens property insurance,” Sen. Anitere Flores (R-Miami) explains.
“The governor vetoed that bill, and so this year we’ve come back to what will hopefully be a redo and have a better outcome,” she goes on.
The key issue Flores and others are looking at is known as depopulation. It’s the process by which Citizens policies are shifted into the private market. By law, Citizens has to take steps to facilitate getting policies off its books, and it’s been a priority for Governor Rick Scott. But Flores is critical of how the take out process works.
“One of the issues that we’ve had is that—it’s happened with my constituents, perhaps its happened with several of yours—that they are getting offers to be taken out of Citizens on almost a monthly sometimes a biweekly basis,” Flores says. “And you’re automatically taken out if you don’t sign a piece of paper saying you want to stay in.”
“A lot of people didn’t get it,” Rep. Jose Javier Rodriguez (D-Miami) says, “because of the format of the letter.”
“You know you might not even open it because it looks like junk mail,” he explains. “If it comes from Citizens who is your insurer, obviously you’re going read it, you’re going to understand it, and if it’s confusing, you’re going to call your insurance agent.”
This year’s legislation attempts to address that problem by requiring all take out offers come from Citizens.
“What this amendment will do will ensure that that happen only on a series of cycles,” Flores explains, “so that our constituents don’t have to be continually harassed, and being asked or questioned as to whether or not they want to leave Citizens.”
Last year lawmakers tried to cap the number of take out offers in a given year, and when Scott vetoed the measure he cited that provision. So, lawmakers have dropped the limit this year. Rodriguez says the measure will also reduce direct solicitation.
“What happens is companies will go and try to get information about customers pretending like they’re going to do a take out,” Rodriguez says. “But in reality they just use that information to directly solicit customers. So myself, my neighbors, many of us have just been getting bombarded since some of these take out programs started and this would stop that.”
Lawmakers also tried bringing back language allowing policy holders to return to citizens if rate increases passed a ten percent ceiling. But Wednesday, the House amended that provision out of the bill. The measure is now bouncing back and forth between the chambers—lawmakers will have to reach an agreement before the bill can proceed to the governor.
And while Rodriguez admits Scott may not like everything in the bill, he says the measure will actually help depopulation.
“You know if the governor’s intent on shrinking citizens with this take out process we have to make sure that there’s confidence in that process,” Rodriguez explains, “and when customers are scared of the process, confused, skeptical—that does not help the governor’s goal.”
However lawmakers choose to proceed time is running out on this year’s session.
