After being postponed every day for more than a week, House Bill 245 was finally heard in the Senate yesterday. Though the bill eventually passed, it was not before several significantly pro-consumer amendments were tacked on. The resulting version of the bill, which passed its third and final reading in the Senate today, is far less dangerous to Florida policyholders than the original draft.
Following yesterday’s vote, it’s clear why Senate Leadership attempted to hold off on the bill for so long – they simply didn’t have the votes to muscle it through without significant changes.
Senator Rhonda Storms, R-Brandon, Senator Thad Altman, R-Melbourne, Senator Anitere Flores, R-Miami, and Senator Jack Latvala, R- St Petersburg, filed the pro-consumer amendments that eventually passed in extremely close votes.
Senator Storms filed amendments that require written proof that a Surplus Lines Carrier, whose rates are not regulated by the Office of Insurance Regulation, agree to not charge a first renewal premium more than the initial rate charged by Citizens. In subsequent years, Surplus Lines Carriers who wish to raise rates more than the 10% yearly cap placed on Citizens premiums must issue a notice informing policyholders that they have the right to return to Citizens at any time – a right that was not guaranteed in the original draft of the bill. Senator Storms clearly understands the value of transparency, especially when it comes to unregulated, out of state insurers
An amendment filed by Senator Latvala further bolstered transparency by requiring at least 45 days written notice to policyholders before the assumption period.
An amendment filed by Senator Flores addressed concern from policyholder advocates that the initially high surplus required of takeout companies did not have to be maintained by amending the bill to require annual submitted proof to the Office of Insurance Regulation.
The amendment that rightfully received the most debate as well as the lion’s share of the press coverage was filed by Senator Altman.
Senator Altman’s amendment fundamentally changed the way unregulated Surplus Lines Carriers could take policies out of Citizens. Originally, HB 245 called for Citizens to notify policyholders by mail 30 days before their insurer was switched – at that point it would be up to the policyholder to fight to stay in Citizens. If no action was taken, they would be automatically taken out of Citizens.
Rather than the original, automatic takeout process favored by the industry, the amended bill now requires Citizens policyholders to provide written consent before being taken out of Citizens.
Quite simply, these changes ensure that policyholders understand their options.
Interestingly, Altman’s amendment was originally killed on a voice vote, but when dissenting Senators demanded a recorded vote, the tally showed a 21-19 split in favor of the amendment.
While this is certainly a great victory for Florida’s policyholders, our fight is not over.
The amended bill was just reintroduced in the House, where the Senate’s decision to allow policyholders to ‘opt-in’ was upheld – The bill has been temporarily postponed, as the bill sponsors decide whether the amended version is even worth passing.
My guess is that we never see it again.
We will continue to keep you updated as the legislative session come to a frenzied finish this week.
