Thursday, November 23, 2006

Potential Insurance Relief

From the Northwest Florida Daily News November 23, 2006:

TALLAHASSEE (AP) Senate President Ken Pruitt informed Senate staff Wednesday that lawmakers may have a special session in January aimed at easing the state's property insurance crisis. Gov. Jeb Bush had been hoping for months that lawmakers might be able to return to Tallahassee before the end of the year to deal with the problem. Floridians consistently say it is one of their biggest concerns, with premiums increasing dramatically and some insurance companies dropping policies in the wake of two hurricane-heavy years. But legislative leaders have said in recent days that it was unlikely that lawmakers could reach a consensus on what type of legislation to take up, making it more likely that any special session would wait until January. By that time, Charlie Crist will be governor, which is also a consideration. In his memo to Senate staff on Wednesday, Pruitt, R-Port St. Lucie, said that Senate committee meetings that had been scheduled for early December were being canceled, and noted the likelihood of a January special session. "We will keep you posted on developments," Pruitt wrote. A special task force appointed by Bush recently sent several hurricane property insurance recommendations to the Legislature. Among their recommendations were making it easier for insurance companies to get reinsurance from a state fund, and allowing consumers to get a variety of policy types to try to lower their rates, such as those with higher deductibles or those that don’t cover as much. Crist could call the Legislature into session in January, or Pruitt and House Speaker Marco Rubio, R-Coral Gables, could lead a move to have lawmakers vote to call themselves into session. The regular legislative session is scheduled to start in early March.

Florida's Citizens Insurance Increase

From the Northwest Florida Daily News, November 23, 2006--

TALLAHASSEE (AP) Homeowners will pay a 2.5 percent surcharge on their insurance premium when they renew policies in a plan approved Wednesday by state regulators, a move to help bail out the state-backed insurance company for people who can't get private coverage. State lawmakers earlier this year voted to pump $715 million in surplus state tax dollars into shoring up Citizens Property Insurance after it came up short of what it needed to pay claims in 2005. Had it not been for taxpayers picking up much of the tab, homeowners would have been facing an assessment closer to 11 percent, the Office of Insurance Regulation said. By law, when Citizens can’t pay all its claims, other insurance companies are required to place an assessment on their Florida homeowners customers to bail it out. Customers of Citizens pay the assessment as well. The $163 million assessment will help Citizens pay off a nearly $1.7 billion deficit from last year. The company isn't expected to have a deficit this year because the state saw no landfalling hurricanes. The new charge is on top of a nearly 7 percent assessment Florida homeowners had to pay to make up for Citizens' deficit from the 2004 hurricane season. Even after the 2.5 percent assessment for the 2005 shortfall, a small amount will still be outstanding. That will be paid off with another emergency assessment, but that will be much smaller because it will be spread out over 10 years. Citizens has more than 1.2 million policyholders in Florida. It paid more than $5 billion in claims during the 2004 and 2005 hurricane seasons.