Industry cheers Scott’s signature of property insurance overhaul billby Dara Kam | May 17th, 2011
Gov. Rick Scott signed into law today a sweeping property insurance measure (SB 408) hailed by the insurance industry but denounced by consumer groups.
Critics say the new law, which goes into effect immediately, will allow insurance companies to raise rates up to 15 percent and make it harder for Floridians to collect on claims. Proponents contend the law will draw new insurers to the state and increase competition.
“A healthy, stable and competitive private insurance market is critical to the success of Florida, given the hazards we face,” Scott, whose staff helped craft the bill, said in a statement. “I commend the Florida Legislature, especially Senator Richter and Representative Wood, for bringing this important legislation forward.”
The new law undoes many of the changes approved by lawmakers and Gov. Charlie Crist in the wake of the catastrophic 2004 and 2005 hurricane seasons.
Among other things, the new law:
- Shrinks from five years to three years the time homeowners have to file claims for hurricane damages;
- Lets insurers make homeowners to pay for repairs before getting reimbursed;
- Permit insurers to raise policyholders’ rates without prior approval from regulators;
Scott’s signature prompted a flurry of accolades from the insurance industry and business groups and a dour statement from Sen. Mike Fasano, who urged Scott to veto the measure.
“For an administration which vowed not to support new taxes or fees, this bill virtually guarantees a 15% premium ‘reinsurance’ increase for Florida policy holders. This is a backdoor tax and fee increase that will hurt most homeowners with a mortgage, consumers and small business owners at a time with very high foreclosure and unemployment rates, all during a fragile economic recovery,” Fasano, R-New Port Richey, said in a statement.
But supporters insist the new law will open up Florida’s insurance market.
“Despite what the critics say, signing this bill into law is the first step toward stabilizing Florida’s property insurance market. It will increase competition by attracting insurance companies that currently do not write property insurance policies in Florida,” said Mark Wilson, president Florida Chamber of Commerce.
Read some of the other blurbs after the jump.
“After enduring years of misguided policies that have wrecked our homeowners’ insurance market, this new law will go a long way in repairing the serious damage that has been done and sends a strong signal to the world that Florida is open for business.” – Kyle Ulrich, Florida Association of Insurance Agents vice president of public affairs.
“Florida faces an array of unique natural risks and this legislation will help us continue to protect Floridians property while also attracting badly needed competition and capital to our state.” – spokesman Bob Lotane, National Association of Insurance and Financial Advisors, Florida
“I commend Governor Scott for his leadership during the legislative session and for signing SB 408 relating to property and casualty insurance. This bill focuses on addressing cost drivers in the system and will yield long-term benefits for Florida by stabilizing the property insurance market and attracting new capital investment to our state.” Florida Office of Insurance Regulation Commissioner Kevin McCarty.