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2014 Session Summary: Insurance

In February, state-run Citizens Property Insurance Corp. dropped below 1 million policies for the first time since 2006. Still, some lawmakers pushed for more reductions in coverage for Citizens policies to reduce the risk of assessments to Citizens and non-Citizens policies alike after a cataclysmic hurricane.
Those efforts were whittled down in SB 1672, which bars Citizens from offering new multi-peril policies to condominium and apartment buildings.
Other bills to reduce the size of the Florida Hurricane Catastrophe Fund, or Cat Fund (SB 482, HB 391) - favored by large insurance companies – and to allow the Florida Insurance Guaranty Association to directly assess policies (HB 143, SB  346) – favored by smaller insurers – failed to pass the Legislature.
The main action on property insurance this session centered on SB 542. The measure, waiting the governor's signature, attempts to lure private companies to offer flood coverage to homes after a 2012 federal law boosted premiums for many coastal homes with National Flood Insurance Program policies.
Chief Financial Officer Jeff Atwater pushed for SB 708, passed by lawmakers this year, which informs homeowners filing a claim of the process and their rights in seeking the claim.
On the auto and workers’ compensation insurance fronts, bills to extend the amount of time for insurers to cancel policies from 30 days to 60 days (SB 490) and to allow companies to get back to work faster after being issued a stop work order for not carrying enough workers’ comp coverage (HB 271) made it to Gov. Rick Scott’s desk.
Flood Insurance
The 2012 Biggert-Waters Act, a federal law phasing out subsidies for National Flood Insurance Program policies near the coast, began to spook real estate agents in the summer of 2013. In October, homes bought or transferred began paying the new, higher premium for flood insurance. Although Congress would pass a law reducing the speed of the rate hikes during the legislative session, lawmakers still passed SB 542, which allows private companies to get fast-tracked rate reviews for flood policies until 2019. But the House’s refusal to accept a provision allowing insurers to offer coverage only up to the amount of the outstanding mortgage means some insurers might be hesitant to jump into the market.
Citizens Property Insurance Corp.
In addition to banning new multi-peril policies for condos and apartment buildings, SB 1672 limits the ability of public adjusters to receive referral fees as well as their ability to accept power of attorney from policyholders, and calls for all Citizens bid disputes to be handled in administrative court, rather than by its board. Lawmakers also passed HB 1079, which delays the ban on Citizens’ coverage of construction projects within the coastal construction line for one year, pushing the effective date back to July 1, 2015.
Auto Insurance
After court decisions shooting down challenges to a 2012 law aimed at reducing personal injury protection (PIP) claims, lawmakers shelved plans to move away from the current no-fault system to a mandatory bodily injury system. But the Legislature did pass SB 490, which would increase the amount of time insurers have to cancel policies from 30 to 60 days and would allow insurers to make changes to bodily injury, property damage and personal injury coverage so long as they don't go below state minimums.
Florida Hurricane Catastrophe Fund
The two competing visions for changes to the Cat Fund remained in stalemate this year. Bills (HB 391, SB 482) to reduce the total coverage of the fund, which acts as the state-backed reinsurance fund for Florida-based insurers, from $17 billion to $14 billion over three years fell flat, as did a bill (SB 228) to lower the retention level, or deductible, in the Cat Fund. Smaller Florida domestic insurers favored the latter approach which would have allowed them to draw down Cat Fund coverage for claims in a smaller size storm. Larger companies favored the reduction in the Cat Fund, which would have pushed other companies to purchase more reinsurance in the private market at higher prices.
Florida Insurance Guaranty Association
Like the 2013 session, bills that would have allowed FIGA, which pays out the claims of insurance companies that go bankrupt, to pass assessments directly to consumers failed to make it through the Legislature. The changes in SB 346 and HB 143 were favored by small insurers, since they would be able to pass through the liability of assessments after a company goes bust.
Workers' Comp Insurance
Lawmakers passed HB 271, which allows businesses to pay a $1,000 down payment on their fine and enter a payment plan to receive a release from a stop work order from the Department of Financial Services. Businesses will also have 10 days, not five, to respond to DFS requests for records before being subject to a stop work order.
Property Insurance Rates and Regulation
Backed by Atwater, SB 708 bans the practice of post-claims credit checks used by insurers to deny claims and allows claims-seekers to be informed of their rights in the process. But insurance companies were stymied when they tried to put restrictions on the “assignment of benefits” – the signing over of future claims payments to contractors in emergency situations, a practice insurers say is being abused – into the bill.