Citizens - controversial bills filed for 2011 Session

Bills have been filed in the Florida Senate and House to modify the statute of Citizens Property Insurance Corporation, Florida's largest property insurer and a state government residual market entity.  The Senate Bill, SB 1714, was filed by Senator Alan Hays.  In 2008 Senator Hays sponsored a bill establishing the Citizens Mission Review Task Force, which made recommendations to begin returning Citizens to a more traditional "market of last resort."  The House Bill, HB 1243, was filed by Representative Jim Boyd.

The bills are likely to be controversial.  In summary, they would:

• Accelerate Citizens rate increases (the so-called "glidepath") to 25% per year (from the current 10% per year) at the policyholder level.
• Prohibit Citizens customers from hiring public adjusters.
• Require Citizens to drop coverage of higher-priced homes and condominiums (the cap would decrease from $1 million in 2012 to $500,000 by 2016).
• Require Citizens to hire a consultant to study whether certain additional operations should be outsourced (Citizens currently outsources some of its services).
• Make homeowners ineligible for Citizens coverage if they can get a policy from a private carrier that charges up to 25 percent more than Citizens does (the current threshold is 15% for "comparable coverage").

For more information on the bills, see the Florida Tribune article, Major overhaul and rate hikes proposed for state's largest insurance company.

This summary was posted by Perry Cone and is post at www.tallyinslaw.com/

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