Bill Newton on Insurance Situation01/09/07
In Tallahassee, advocates representing a coalition of consumer groups testified in front of the Senate Banking and Insurance Hearing today, pressing their concerns to lawmakers as to what they hope will come out of the Special Legislative Session that will take place next week. It follows a proposal that Senate Republicans unveiled yesterday aimed at giving consumers a break from high insurance costs without hurting insurers. The 153-page package was the first major proposal for the special session. House leaders, Democrats and Gov. Charlie Crist are expected to offer their own proposals.
The Senate proposal would cut in half, from $6 billion to $3 billion, the amount of losses insurance companies must pay out before they can buy reinsurance from the state catastrophe fund, which is cheaper than the private reinsurance market. It also would allow insurers to buy up to $3 billion more from the fund than the $16 billion limit for 2007 and 2008.
Bill Newton is the Executive Director for FCAN, the Florida Consumer Action Network. He says the Senate plan would save consumers some money, but at a risk (roll tape#1 o.q.”that you might care about”)Among the big beneficiaries of the legislation would be property owners who now can get coverage only from Citizens Property Insurance, the state-backed insurer of last resort. The bill would rescind a 56 percent Citizens rate hike that took effect January 1st, and would hand rebate checks to homeowners who've already been hit with that charge.
Senate Democratic Leader Steve Geller who assisted Republican Sens. Bill Posey of Rockledge and Dan Webster of Winter Garden in crafting the bill, said he wants the bill refined to include guaranteed rate relief for most Floridians.
But Posey, lead writer of the Senate Republican plan, said there's a reason the bill doesn't guarantee reductions. He said guarantees would be irresponsible despite the political appeal. Posey said there are many provisions in the bill that should result in rate relief, including the proposal to expand the catastrophe fund. Again, FCAN’s Bill Newton (roll tape#2 o.q.”can really help consumers”) That special session regarding Property Insurance begins a week from today.