Lawmakers gather at FL Capitol to attempt to solve state’s growing insurance crisis

‘I think we generally all agree that it doesn’t do enough’

By: - May 23, 2022 10:31 am

Florida’s Old Capitol and New Capitol, viewed from the Leon County Courthouse on March 21, 2022. Credit: Michael Moline

The Florida Senate opened a special session on Monday to debate a $2 billion plan to stabilize Florida’s property insurance market, which has been plagued by insurer insolvency and dropped homeowner policies.

The Senate convened at 9 a.m. and, before sending the package to the Appropriations Committee, took time to honor Senate Secretary Debbie Brown, who’s retiring after 30 years with the chamber. Nobody mentioned the reason for the gathering while on the floor.

The House was due on Tuesday to join the debate on a legislative package that also would crack down on alleged claims fraud and limit attorney fees arising from litigation against insurance companies. The special session is set to adjourn on Friday but could be extended if necessary.

FL Sen. Jeff Brandes, R-St. Petersburg. Credit: Colin Hackley

Sen. Jeff Brandes, a Pinellas County Republican who attempted to gather enough legislators’ signatures to force a special session on the topic, said following the floor session that he was still evaluating the legislative package, which dropped on Friday evening.

He had no hand in drafting it, he said — the governor, Senate President Wilton Simpson, House Speaker Chris Sprowls, and the chief bill sponsors (Jim Boyd in the Senate and Jay Trumbull in the House, both Republicans) handled that. Democrats who comprise a majority in both chambers also have offered legislation.

“I think we generally all agree that it doesn’t do enough — that the market’s still in a very, very tenuous position. And we’ll see who can actually get coverage June 1 for their reinsurance. I’m fearful that maybe as much as 15-to-20 percent of Florida’s carriers will not be able to finish out their reinsurance stacks and may lose their ratings,” Brandes said.

That is, their permission from the state Office of Insurance Regulation to do business in Florida.

Democratic Sen. Shevrin Jones, representing parts of Broward and Miami-Dade counties, said the Legislature could have dealt with the property insurance issues during the regular session, but GOP legislators “focused more on cultural wars.” (That would include the so-called “Don’t Say Gay” law that prohibits classroom instruction of sexual orientation or gender identity in younger grades or in other circumstances. Or, HB 7, now a law, that restricts certain conversations about race and gender in schools and workplaces.)

At the same, Shevrin said, “Floridians need relief now and we need to deliver that relief to them now.”

Steep losses

The legislators were in Tallahassee at the order of Gov. Ron DeSantis, who in calling for the special session noted that Florida accounts for 79 percent of litigation against insurers nationally against 9 percent of total claims, and that insurance losses totaled $1 billion during each of the past two years.

The $2 billion, to be taken from the state’s general revenues — meaning taxpayer money — would create a resinsurance pool to back up insurance companies in case of a hurricane or other disaster. Reinsurance is insurance for insurers. Hurricane season opens on June 1.

Even that money might not be enough: Citizens Property Insurance Corp., the state-backed insurer of last resort, needs $4.25 billion in reinsurance coverage, twice as much as last year, consistent with a doubling of its customer base. That doesn’t count needs of private insurers.

And, with global warming generating more and more serious weather conditions, the problem can only grow.

“The reinsurance piece of this bill is really the major problem and potentially it doesn’t go far enough to address the overall problem of the inability of these carriers to find reinsurance at this level,” Brandes said of the package.

He warned the package won’t necessarily mean lower premiums for homeowners. “Not immediately. I mean, I think its going to prevent some higher rates in the future, but it’s not probably going to immediately have a rate impact,” Brandes said.

“Ultimately, they’re going to have to come back in special session either right after the election or shortly thereafter to address some of the more pressing needs of this market.”

By that time, Brandes himself will have retired from the Legislature.

Additional features

In addition to the reinsurance pool, the proposed legislation:

Aims to keep insurers from refusing to cover homes with roofs less than 15 years old solely because of the roof’s age

Sets new limits on attorney fees in litigation between insurers and policyholders and aims to limit alleged insurance fraud leading to inflated payouts

Mandates that state regulators promptly carry out their duties to officially analyze and report why insurance companies fail, and to hold the companies accountable

Earmarks $150 million for matching grants of up to $10,000 to “harden” homes with improvements making them less vulnerable to damage.

Florida Phoenix reporter Issac Morgan contributed to this report.

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Michael Moline
Michael Moline

Michael Moline has covered politics and the legal system for more than 30 years. He is a former managing editor of the San Francisco Daily Journal and former assistant managing editor of The National Law Journal. He began his career covering the Florida Capitol for United Press International. More recently, he wrote for Florida Politics.

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