Last week in Tallahassee, Patricia McGrath and Laurie Swanson (Middle Keys) met Jean Siebenaler (from the panhandle) and Dee Melvin (from the Villages) to observe the Special session of the Florida legislature. The subject of the Special Session, called by Ron DeSantis, was to take up Florida property insurance. Ostensibly the session was to address the rising costs of property insurance with the goal of taming the runaway rate increases levied by insurance companies. Exorbitant rates that are often devastating to homeowners.
We settled first in the Senate Appropriations Committee to see the bill (2D) being legislated; then moved to the House Appropriations Committee to see the bill legislated there. I expected a give and take of ideas during this part of the legislative process. Instead, I saw a bill fully constructed in some secret place and plopped onto the legislative floors. These bills came fully formed from the governor’s office it seems. The bills were not changed from the original no matter how many suggestions were made for improving the bill or improving outcomes for the homeowner.
Oh yes, the Democrats tried to change the bill by presenting amendments, amendments that were summarily voted down mostly with “no” voice votes. When 5 hands went up there was a compulsory recorded individual vote. At that time, the congressperson was to flick a switch on their desk to register a ‘yes’ or a ‘no’ vote. During these amendment presentations and votes many of the congress people were out of the room and so a neighboring congress person voted for the absent congress person. In other words, a quorum was not present on the floor for most of the votes on amendments and the votes were not posted by the congress persons themselves. I saw Rep. Melo (80) vote for Keys’ Rep. Mooney (120) on numerous occasions. Mooney repaid the favor by voting for Melo by activating the switch on her desk when she was absent.
Rep. Mooney casts vote for Rep. Melo while she was absent. Melo voted for Mooney on numerous occasions while Mooney was not at his desk during the vote.
I learned that DFS (Department of Financial Services) and OIR (Office of Insurance Regulators) are the two offices whose job it is to hold insurance companies to the statute. They are to collect data and watch where the money goes. The members of OIR are appointed by the governor.
Through discussion (labeled debate) on the insurance bill, that is soon to become Florida law, it became apparent that OIR had collected little or no data on the state of the current insurance companies. Data needed to craft the current legislation. Legislators asked for that data numerous times and were told that it did not exist. When asked how they could know how to craft a bill to improve insurance rates without data, they were either stonewalled or told there was no data. Yet the proponents of the bill would not call into question actuarial tables used by the insurance company—data that no one had bothered to access or perhaps it was hidden in the back room where this bill came from.
When legislators asked why OIR did not do its job, various excuses were proffered. It was confirmed that OIR, who has the power to deny rate increases proposed by individual insurance companies, has persistently rubber-stamped double digit rate increases. The main reason proffered by the Republican sponsors of the bill for OIR’s failure was that OIR had ~ 13 regulators to cover the whole state of Florida and a 22% vacancy. Proponents of the bill said it was not possible to fill those positions because private industry pays more. Why does Florida only have 13 people in OIR when comparable states have many multiples of 13 to regulate their insurance companies?
The bill’s highlights as discussed were as follows:
- Insurance will be granted for roofs over 15 years if the roof, after an official inspection funded by the owner, indicates that the roof has 5 more good years. If the roof is found wanting the owner will be denied insurance on the roof.
- There will be 2 types of roof insurance offered to the homeowner. The no-deductible roof insurance will be at the ballooning rates that are in force today with no cap. Insurance companies are required sign up for RAP (Reinsurance to Assist Policyholders) this year or next. That program allows the insurance companies to offer homeowners roof insurance policies with up to 50% deductible. There is no provision in the law that forces the insurance company to lower rates on these policies. Also, the State is putting up $2 billion for the insurance companies to fund this program. Representative Geller pointed out that if the homeowner cannot pay the deductible which could be thousands of dollars, they could lose their house. Shoulder shrug by the Republican proponent of the bill.
- The insurance company can drop the homeowner mid-claim if the homeowner challenges the insurance company for non-payment of claims. Many of the Democrat led amendments tried to rectify this. It was classed by Rep. Trumbull (the proponent of the bill) as an unfriendly amendment. “Unfriendly to who?” Shrug. Note that this leaves the homeowner without a fixed roof and unable to get other insurance because they have an open claim.
- In egregious cases when the insurance company is the bad actor, judges will not be able to penalize the insurance company by multiplying the award to the homeowner for his mistreatment.
- This bill allows the insurance companies to draw out the claim payout for years with no penalty on the insurance company. The insurance company is within their rights to put off an appraisal for years if they so wish.
- This bill does not consider that climate continues to aid and abet the destruction of property in Sunshine State. There is no provision for climate change in the bill. Hurricane and sea level rise are not addressed.
- Trumbull (R) and company admitted that it would make no difference in ballooning rates this year and possibly not for 18 months. He also said there is no guarantee that rates will come down at all even with 50% deductible.
It came to light during the debate session that was not a debate, but a statement of position, that this bill fulfils the insurance companies wish list. SB-HB 2 disables the consumer and rewards the insurance companies by allowing them to continue the shell game that they have been playing for years. Democrats charged (not refuted) that when an insurance company is in trouble or wants to exit the Florida market, they can offload assets to a sister company and declare bankruptcy. This leaves their customers with no insurance and/or unable to get their claims filled. This bill was created without any verifiable statistics. Statistics were not verifiable because OIR did not collect any statistics. This bill was created to fix problems that were no more than rumors and hearsay proffered by the insurance companies. The session was called and executed on such short notice that there was little time to write a bill that considered possibilities that would be sounder. The bill was passed as it came in from the governor’s office probably right out of the insurance lobby.
At 1:25PM on Wednesday, May 25th, Mooney got up and gave a speech praising the bill. He said that the insurance problems will not be fixed this week, but “this bill is better than doing nothing.”
Rep. Mooney sending and reading emails while amendments were presented. Mooney voted “no” on all amendments.
FYI Monroe County and Miami/Dade are not covered by this insurance. We are covered by the insurance company of the last resort—Citizens.
Watching the sham that masquerades for Florida government was incredibly disappointing to me and my fellow travelers.