Erin Go Bragh!
The work of the Florida Senate Select Committee on Property Insurance Accountability is finished. Here is a pdf file containing the Report they submitted on March 13, 2008 to the President of the Florida Senate: Download select_committee_reccos.031308.letter.pdf.
In the Report, the Select Committee made many recommendations. The Committee broke out three areas in its Report and made recommendations as to each area. The Committee made 14 recommendations concerning "RATE FILINGS", another 14 recommendations as to "COMPANY PRACTICES" and 2 final recommendations regarding "FUNDING PROPOSALS". Here are some of the more significant recommendations:
RATE FILINGS
- For all Rate Filings, require that rates be based on Catastrophe Models that are approved in Florida, "without any modifications to the model."
- Require that approved CatClaims Models be used by Property Insurance Companies when these Insurance Companies determine their probable maximum loss.
- Establish one standard for allowable Reinsurance expenses.
- "Require insurers to certify in a rate filing the number of policies they intend to non-renew and that the reduced risk is calculated into their rates."
- "Repeal the arbitration option," by which Property Insurance Companies arbitrate Rate Hike Denials, "or extend the temporary prohibition on allowing insurers to use the option of appealing to an arbitration panel a rate filing disapproved by OIR [the Florida Office of Insurance Regulation]."
- If Insurance Companies introduce information in support of a rate filing at a Hearing before the Florida Department of Administrative Hearings, then they must previously have provided it to the Office of Insurance Regulation.
COMPANY PRACTICES
- Increase the amount of fines that an Insurance Company must pay for practices that violate the Florida Insurance Code.
- Provide that Insurance Company officials that knowingly and with intent to deceive, "make false material statements or reports to OIR," shall be subject to criminal penalties.
- Provide criminal penalties, also, for obstruction of "the proper administration of any investigation or proceeding by OIR," or by the Florida Department of Financial Services, "or contract examiner."
- Impose Attorney's Fees and Costs or Fines if a Court "determines that a document identified by an insurer as a trade secret is not a trade secret and is a public record."
- "Prohibit insurers from considering age, race, income level, education, credit score or any other personal characteristics of a policyholder in evaluating or adjusting a property insurance claim."
- Strengthen the requirement that if an Automobile Insurance Company writes Automobile Insurance in Florida, and "the insurer or its affiliate" also writes Property Insurance in other States, then that Automobile Insurance Company must also at least write Homeowner's Insurance in Florida.
- Establish a moratorium by Statute, subject to certain strict exceptions, that Insurance Companies shall not cancel residential Property Insurance Policies following a Hurricane.
The Florida Insurance Council, a prestigious Insurance trade association which claims 64 Groups and 200 Insurance Companies as its members, issued a press release on Thursday, March 13, 2008 which contained comments about the recommendations. The Florida Insurance Council did not like the recommendations. In part, the press release warned: "The recommendations also fly counter to so far successful efforts by the state to attract new insurers to Florida to help control the growth of Citizens Property Insurance Corporation."
A former co-chair of the Committee reportedly will be happy if even half of the recommendations become law. Julie Patel, "Senate Panel Urges Tough Legislation on Florida Property Insurers/Sweeping Changes Target Rate Hikes, Dropped Policies" (South Florida Sun-Sentinel.com, Friday, March 14, 2008).
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