GOVERNOR CRIST SIGNS BILL REDUCING FLORIDA’S INSURANCE RATES
~~ ~Increases competition in Florida insurance market~ ~~
January 25, 2007
Contact:
ERIN ISAAC
(850) 488-5394
TALLAHASSEE – Governor Charlie Crist today signed legislation that will provide comprehensive insurance reform, including broad-based, meaningful reductions in property insurance rates and enhanced competition within Florida’s insurance market. The bill also includes consumer protections that require insurers to promptly pay claims and discontinue dropping policyholders during hurricane season.
“Today, we have a message for the people of Florida: ‘Help is on the way!’ We have heard the calls for help from Floridians suffering from high insurance rates,” said Governor Crist. “With this legislation, the powerless have become the powerful, and the credit goes to the people of Florida for letting their voices be heard.”
“This legislation is an important step in the right direction for Florida’s homeowners,” said Lt. Governor Jeff Kottkamp. “Thanks to Governor Crist’s tireless leadership on this issue, property insurance is more affordable for Floridians.”
Governor Crist praised House Speaker Marco Rubio and Senate President Ken Pruitt, as well as Senate Minority Leader Steve Geller and House Minority Leader Dan Gelber, for the historic bipartisan partnership that brought about the legislation during a special session of the Legislature.
In summary, House Bill 1A provides the following changes to Florida’s insurance law:
Provides relief from skyrocketing property insurance rates by providing a framework to lower rates for all Floridians. The bill expands the Florida Hurricane Catastrophe Fund that allows insurers to purchase less expensive reinsurance and pass those savings on to consumers.
Enhances competition and protects consumer choice within Florida’s insurance market by allowing Citizens Property Insurance Corporation to compete with private insurers. The bill freezes rates, repeals all 2007 rate increases and provides refunds for consumers who have already paid those increases
Protects consumers by preventing companies from raising rates without state approval, from dropping policyholders during hurricane season and from delaying payment of claims. Policyholders will have more flexibility and consumer choice because insurers are required to allow coverage options and installment payments for premiums. The Insurance Consumer Advocate will provide a consumer rating for each insurance company, allowing Floridians to make more educated decisions when choosing an insurance company.
Eliminates regional exemptions to the Uniform Building Code, with the goal of reducing the number of buildings damaged or destroyed by storms, and requires insurers to take into account hardening of homes when establishing rates.
Requires insurers to return excess profits to policyholders. The bill also provides the first step in eliminating cherry-picking – a practice where insurance companies sell only profitable automobile insurance and do not offer property insurance, which involves more risk. Additionally, the law places more restrictions on nationwide companies whose Florida-only subsidiaries raise rates while the parent companies generate excessive profits.
“Today is just the beginning; I thank Speaker Rubio and Senate President Pruitt for their hard work on behalf of the people of Florida,” said Governor Crist. “With the great leadership of the House and Senate, I know we can achieve other goals for Floridians this spring.”
Governor Crist was joined by Speaker Rubio, Senate President Pruitt, Representative Gelber, Senator Geller and Conference Committee members.