Bill would allow easier climb for property-insurance rates
3/4/2010
TALLAHASSEE – Florida lawmakers are again seeking to loosen rules on property insurers by allowing them to more quickly raise premiums to recoup the costs of buying "reinsurance" and other expenses.The move is the second act of a push by the Legislature to scale back some of the reforms it rushed to pass in 2007, after property-insurance premiums exploded in the wake of the busy 2004 and 2005 hurricane seasons.
But one piece of the legislation unveiled Wednesday drew quick criticism at its first hearing before the Senate Banking and Insurance Committee.
Among other changes, the bill, SB 2044, would allow an insurer to pass along to its customers any losses it suffered from discounts offered to homeowners who hurricane-harden their homes with improvements like storm shutters or new roofs. Insurers who can prove to the state that they suffered financial losses from the discounts could recoup them by raising rates on all homeowners.
"We've been encouraging people to mitigate their homes for years. Now we're going to say ‘You're saving too much,'" said Sen. Mike Fasano, R-New Port Richey. "Why bother giving them the discounts?"
Senate Banking Chairman Garrett Richter, R-Naples, said that if the improvements didn't save companies money, homeowner rates "would have to change." Not allowing companies to recoup their losses was effectively telling them "tough luck," he said.
The bill would allow insurers to ask for higher rates more quickly to recoup certain costs for buying "reinsurance" and other claims-payment expenses after major storms.
It would also let insurers drop policyholders with 45 days notice -- instead of up to 180 days -- if they can prove they are in poor financial shape.
Source: Orlando Sentinel