Property insurance reform inches forward during week 4

Here is a run-down on key property insurance bills during week 4 of the Florida 2011 legislative session:

• Rates for Property Insurance.  The House Insurance & Banking Subcommittee (HIB) voted to eliminate the “flex rating”/“choice” proposal from H 885 and replace it with an expansion of the expedited process for recoupment of reinsurance costs that is currently in place.  The HIB-approved bill would allow an insurer to request a recoupment rate increase of up to 15 percent per policyholder (compared to 10 percent under current law), and permit the filing to include related expenses and profits (not permitted under current law).  Flex rating is still contained in the Senate bill (S 1330) that has been approved by two Senate committees.

Property issues dominate week 2

Property insurance issues were front and center, again, during the 2nd week of the 2011 Florida legislative session:

• Flex rating/choice:  A bill that would allow insurers to raise individual policyholder rates by as much as 30 percent a year, SB 1330, was approved by the Senate Banking & Insurance Committee.  The bill's sponsor is Sen. Alan Hays.  A similar bill was passed by the Legislature last year, only to be vetoed by Gov. Christ.  See more at State lawmakers push ahead with bill that allows 30 percent insurance rate hike.
  

Commercial rate de-regulation

Both Senate and House insurance committees voted out legislation this week that would expand the commercial lines products for which rate pre-approval is not required.  CS/SB 178 was approved by the Senate Banking and Insurance Committee on Monday.  The House companion bill (HB 99) was approved by the House Insurance and Banking Committee on Wednesday.

Some commercial products were exempted from rate pre-approval during the 2010 legislative session.  The 2011 bills now working their way through the Capital would add the following products to the list:  fiduciary liability, general liability, nonresidential property, nonresidential multiperil, excess property, and all commercial motor vehicle insurance (the 2010 law exempted commercial motor vehicle insurance covering a fleet of 20 or more vehicles).  The Florida Office of Insurance Regulation (OIR) would retain authority to review rates after they are put into effect.

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Posted by Perry Cone at www.TallyInsLaw.com/

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