A massive effort to overhaul state-backed Citizens Property Insurance Corp. was delayed from a final vote in the Senate on Tuesday amid concerns over whether there's enough support to pass the bill.
Sen. David Simmons (R-Maitland) said he is working with senators who remain on the fence about his proposal, SB 1770, which is intended to quickly shift more than one-seventh of Citizens' 1.3 million policies to private insurers through a clearinghouse and imposes higher rates on new policies for Citizens remaining customers.
Simmons claims the bill could pass now.
"I already have more than the necessary 20 votes," Simmons said. "I believe in getting consensus and I believe in being able to do something more than skate by with the 21 votes. I want to solve the problem that those who would vote 'no' might have."
Simmons intends to further amend a part of the bill involving how the new rate structure would affect buyers of new homes, an effort to ease the minds of some South Florida lawmakers, where there are larger numbers of Citizens customers.
The Senate returns to the floor April 24.
Opponents believe their last minute lobbying efforts have shaken enough lawmakers to reconsider the package.
"The delay of this bill to raise rates and stall our housing recovery shows that policyholders and consumer advocates are making a difference," said Sean Shaw, founder of Policyholders of Florida and an employee of a law firm that represents consumers in cases against insurance firms. "We will continue to pound lawmakers with the facts — this bill would hurt our housing recovery, harm policyholders, and make rate making even more political," he said.
The overall proposal also reduces the maximum value of properties that could be covered and would make the company's executive director an appointee of the governor and state's chief financial officer.
Sen. Jeff Clemens (D-Lake Worth) said the clearinghouse proposal would have advanced on its own, but the proposals to increase rates to actuarially sound figures for new policies will eventually allow private companies to hike premiums on their current customers as the low-cost competition is diminished.
"This jacks up rates for everybody in the state eventually," Clemens said.
Simmons said a remaining concern from some senators is that currently the bill would require new policy holders to pay rates in line with what neighbors are being charged by private firms, which in some areas could be 50 percent to 90 percent higher.
An amendment Simmons intends to offer next week would require the buyers of homes now covered with Citizens wind-only policies to first check if they can receive coverage from a private firm. If the buyer can't find a rate within 15 percent of Citizens, the buyer would be able to purchase Citizens' multi-peril policy.
"We don't have an immediate solution, but we have a good solution," Simmons said.
The one week pause also could provide legislators a chance to review the House proposal, HB 835, by Rep. John Wood (R-Winter Haven).
Wood's proposal includes parts of Simmons' bill, including the clearinghouse for the private firms to pick up the least risky-policies, an inspector general to watch the daily internal operations at Citizens, a slow reduction of the cap on policies to $500,000 in most areas, and a prohibition on new polices seaward of the coastal construction control line.
Proponents, including the Florida Chamber of Commerce, say the fixes are needed to reduce the size of the financial risk the state-backed company places on all policy holders in Florida and hope to make the company once again the insurer of last resort.
David Hart, executive vice president of the Florida Chamber, supported the delay, as he said he believes an overwhelming majority of lawmakers support the concept of reducing the size of Citizens and making rates competitive with the private market.
"I think it's better that they slow down right now," Hart said. "It gives them a chance to see what the House produces and they can work out any difference before 1770 is (back) on the floor."