Florida Chief Financial Officer Alex Sink has claimed that the recent legislative session was favorable to consumers of insurance. It was, but it left a lot to be desired. While not noted as significant legislation, Senate Bill 2860 contains a renewed agenda concerning Citizens as a primary insurer versus an insurer of last resort. Private market advocates should be happy to see a commission has been established to study this. Personally, I think this is good and Florida should try to keep out of the insurance business as much as possible. "Free enterprise" is important and while government has a significant role regulating insurance, there is a definite difference between being the regulator and the government being the operator.
To the extent possible, government should never compete with private business. Florida is allowing private insurance companies to borrow from the Citizens surplus in an effort to encourage private insurers to enter the Florida wind market. I am not certain if this is good or not, but it is obvious that Florida is using its own capital to pay for new entrants into the property insurance business. Again, the "free enterprise" proponents are winning the battle, although this is not truly "free enterprise" because government is giving loans to help. The bill also places restrictions upon an insurer’s right to claim privileges to documents subject to an investigation by the Office of Insurance Regulation, raises administrative penalties for insurers guilty of trade practice violations, and allows lawsuits against insurers not paying undisputed claim amounts within ninety days.
Interestingly, the Citizens Task Force that was authorized to analyze Citizens claims practices did not get any legislation passed regarding how Citizens handles its claims. Amazingly, it did not even offer any such legislation. Instead, it suggested with the help of the Florida Association of Public Insurance Adjusters, a bill which more stringently regulated public adjusters. I view this bill favorable to public adjusters and the public. The Citizens Task Force, however, utterly failed at its mission although there has been some good to come out of it–Citizens has a public forum where it can be called out on its continued wrongful claims practices.
