Florida lawmakers will return to the Capitol the week of May 23 to address problems in the property insurance system that have led to homeowners losing coverage and facing skyrocketing premiums.
Governor Ron DeSantis called a special session for May 23-27 on Tuesday and listed general topics such as reinsurance, the Office of Insurance Regulation and changes to Florida’s building code to improve the affordability of home insurance.
In the proclamation, DeSantis said state insurers had experienced “two consecutive years of net underwriting losses exceeding $1 billion each year,” while pointing to issues such as a large number of claims lawsuits.
House Speaker Chris Sprows, R-Palm Harbor, preferred to wait to make additional changes until a 2021 property insurance law has more time to apply. He released a statement on Tuesday saying the House will see if more can be done.
“The Legislature has made great strides on meaningful property insurance reforms in 2021, and we are already seeing the positive impacts of this work,” Sprows said in the statement. “We look forward to working with our partners to assess whether we can do more to address the availability and affordability of property insurance. Florida House will remain primarily focused on meeting the needs of Florida policyholders.”
In 2021, lawmakers approved changes that included a new formula to limit fees for attorneys who represent homeowners in lawsuits against insurers and a reduction from three to two years in the time limit for filing claims. They also passed a proposal to block roofing contractors from advertising to entice homeowners to file insurance claims, though a federal court blocked that part of the law on liberty grounds. expression.
The law also authorized larger rate increases for customers of the state-backed Citizens Property Insurance Corp., which is often able to charge less than private carriers.
Although the DeSantis proclamation did not provide detailed proposals, one potential issue could be helping insurers address issues of cost and availability of reinsurance, which is essentially emergency coverage that plays a critical role. in the Florida market. The special session will be held shortly before the renewal of reinsurance contracts in June.
At a meeting last week of the Florida Insurance Guaranty Association, Tim Meenan, the agency’s general counsel, said one possibility could involve temporarily making additional reinsurance coverage available through the Florida Hurricane Catastrophe. Fund, which provides relatively inexpensive reinsurance. The Florida Insurance Guaranty Association is watching market issues closely as it pays claims if insurers become insolvent.
DeSantis announced on April 18 his intention to convene a special session on property insurance. It came a day before lawmakers began a three-day special session that included passing a congressional redistricting plan and two bills targeting Walt Disney Co.
During an appearance at UF Health Jacksonville on April 18, DeSantis said the insurance session will try to “bring some common sense, stabilize and have a functioning market.”
The House and Senate were unable to reach agreement on an insurance bill during this year’s regular legislative session, which ended March 14, with the Senate keen to take more aggressive steps to strengthen private insurers.
For example, the Senate has proposed allowing new deductibles of up to 2% on roof damage claims — a consequence of complaints from insurers that questionable, even fraudulent claims drive up costs. But the House rejected the idea, which would have resulted in increased out-of-pocket costs for homeowners who have to replace damaged roofs.
While Sprows urged patience, problems have continued in the insurance market, with companies abandoning policies and seeking steep rate increases due to what industry officials say are significant financial losses. .
St. Johns Property Insurance Co. and Avatar Property & Casualty Insurance Co. recently went into receivership after being declared insolvent. Also this month, Tampa-based Lighthouse Property Insurance Corp., with about 27,000 customers in Florida, went into receivership in Louisiana.
Part of the fallout from private market troubles has led to thousands of homeowners each week seeking cover from Citizens Property Insurance Corp., which was set up as an insurer of last resort.
Heads of state have long sought to shift citizen policy to the private market, at least in part because of concerns about the financial risks if the state were hammered by a major hurricane or multiple hurricanes.
Citizens saw its number rise from 817,926 fonts on March 31 to 842,298 at the end of last week and is expected to top one million by the end of the year.
During his April 18 comments, DeSantis said other unfinished business from the regular session could be added to the insurance session.
Another of the biggest unfinished business concerns proposals to impose additional requirements on condominiums after last year’s deadly collapse of the Champlain Towers South building in Surfside. DeSantis’ proclamation on Tuesday did not specifically mention co-ownership requirements, though issues could be added at the special session.
– News Service Editor Jim Saunders contributed to this report.