Tallahassee, FL - An ambitious property insurance rewrite with everything including the kitchen sink(hole) has been filed and will get its first public hearing next week as lawmakers try again to reduce costs for the industry.
From making it harder for public adjusters to re-open old claims to holdbacks of payouts pending proof of repairs, the bill (SB 408), sponsored by Sen. Garrett Richter, R-Naples, bears many similarities to legislation vetoed by Gov. Charlie Crist last year , who during his independent campaign for the U.S. Senate argued that part of it would raise rates in difficult economic times.
Richter, chairman of the Senate Banking and Insurance Committee, said the bill is a template for a final product that may not emerge until well into the session. The bill is expected to get its first hearing on Tuesday before Richter’s committee.
“I’m sure we’re going to see many changes between the bill that’s filed and the bill that we finally come up with,” Richter said earlier this month. “This bill is a starting point in that discussion.”
Among the provisions are:
-Allowing insurance companies to hold back a portion of claims payments until the policyholder shows proof that repairs and replacements are indeed taking place. Insurers have argued that Florida is one of the few states that requires insurers to pay claims up front and does not require proof that claims are not simply being pocketed.
-Reducing to three years the length of time a policyholder can re-file a claim, down from the five year window now on the books.
-Shifting the burden of proof in contested sinkhole cases from an insurance company burden to prove damage wasn’t caused by a sinkhole to a policyholder burden to prove it was. It also would require sinkhole work to be under contract before full payment is made.
- Placing restrictions on public adjuster advertising and capping commissions public adjusters can take on re-opened claims.
-Allowing an insurer to cancel a policy within 45 days if state regulators determine the cancellation serves the public or policyholder’s interest.
The industry tried to push through a similar broad ranging bill last year, and were disappointed by Crist’s veto. Crist left office earlier this month, and Gov. Rick Scott is thought to be more sympathetic to the industry. Scott hasn’t specifically commented on the new legislation.
One notable omission in the new proposal from last year’s bill is a provision to allow insurers to raise rates up to 10 percent annually to adjust for inflation and changing reinsurance costs without having to go through full blown hearings before the Office of Insurance Regulation, which annually calculates increases in those cost drivers.