Gray Rohrer
Three days after the Senate advanced a bill allowing lightly regulated surplus lines companies to take over some Citizens Property Insurance Corp. policies, a House panel approved a similar bill.
But the House version (HB 1503) is substantially different from the Senate bill (SB 1716), setting up a potential dispute between the chambers.
The main difference is over which type of properties would qualify to be taken out of Citizens and put into a surplus lines carrier. The Senate wants to allow second homes to be taken out, while the House version would apply to commercial residential properties.
“I don’t like the version of the bill that’s in the Senate,” said Rep. Tom Fabricio, a Miami Lakes Republican. “That version is a little scary. I think that may cause some of my constituents’ premiums to go up both on their second homes and it’s not going to come down on their primary home. So it’s not going to give that rate relief that I think we’re working towards.”
The bill passed unanimously through the House Insurance and Banking Subcommittee on Thursday. One piece of the measure, though, concerned Rep. Kevin Steele, a Dade City Republican. It requires Citizens customers who must purchase flood insurance as a condition of staying in Citizens to not include coverage for their personal possessions, or contents, in the home as part of the flood coverage.
“My biggest concern is every time I turn around the insurance company doesn’t want to insure certain objects,” Steele said. “When you remove contents, it makes me think are we going to have another policy now for contents, and it concerns me … that we’re diverting the cost to some other policy.”
Surplus lines companies aren’t like regular admitted carriers. They typically cover pricier homes in riskier coastal areas, their rates aren’t approved by the Office of Insurance Regulation (OIR) and customers can’t sue them in Florida if a dispute over a claim arises.
The move to allow surplus lines carriers to take over Citizens policies is a sign lawmakers are looking to push more policies out of the state-run company, to reduce the chance that a large hurricane or series of storms wipes out Citizens’ ability to pay claims, prompting assessments on all homeowner policies in the state.
However, another part of the bill seems to go in the other direction, allowing more policies into Citizens. It would partially lift the cap on home values to be eligible for Citizens. Under current law, homes valued at more than $700,000 aren’t eligible for Citizens, except for homes in Miami-Dade and Monroe counties. The bill would move the cap up to $1 million.
