Even for Floridians accustomed to the danger and uncertainty of hurricane season, there are few months more fraught with peril than the 60 days legislative session in Tallahassee. In the last six storm-free years, at least, the Legislature has clearly done more damage to Florida policyholders.

Following a particularly active 2011 session, property insurance policyholders were mercifully spared in 2012. With insurance industry focus clearly fixed on PIP reform, property issues took a back seat this year. That’s not to say that industry lobbyists didn’t make an effort — you’ll remember that several ominous bills loomed large on the horizon back in January.

With the 2012 regular legislative session in the rearview mirror, it’s time to look at the bills that passed, as well as those we narrowly dodged and might very well see again next year.

Bills that Passed the Legislature:

  • Citizens Property Insurance Assessments
    • HB 1127 (Albritton)
      • Citizens property insurance, though well meaning, is often regarded by private insurers as a ticking time bomb. Should a large storm hit Florida, private insurers and Florida taxpayers would be on the line for millions in potential assessments. HB 1127 shrinks regular assessments to 2%, down from a maximum of 18% (current law). Shifting balance of deficit (if any) to emergency assessment mechanism lessens the risk to Florida taxpayers and could potentially open up Florida’s insurance market to more competition. This is a rare bill that manages to help both policyholders and the insurance industry – truly a remarkable feat and one worthy of praise.
  • Florida Hurricane Catastrophe Fund Funding
    • HB 5505 (Hooper)
      • This bill provides a means to finance $1.5 billion for funding Florida Hurricane Catastrophe Fund by selling Florida premium-tax credits to insurers. See Section 8 of Conference Committee amendment. This bill was a very late addition to the radar screen, and it remains to be seen what effect it will have on the insurance market. We’ll keep you posted.
  • Omnibus Insurance Bill
    • HB 1101 (Horner)
      • Any time a general insurance bill is filed and lingers until the end of session it is dangerous. These are often the bills that failed language gets thrown into at the last minute. Fortunately, that wasn’t the case with HB1101. The final version of the bill makes miscellaneous revisions to Insurance Code related to property insurance, motor vehicle insurance, travel insurance, agent license exams, and reinsurance summary reports. Included also is modernization of captive insurer licensing (from HB 379 and SB 610). Thankfully, the final bill omitted a provision that would have allowed insurers to use a “Notice of Change in Policy Terms” to remove sinkhole coverage from property insurance policies.
  • Commercial Lines Insurance
    • HB 941 (Holder)
      • The bill amends various provisions relating to commercial lines insurance.
  • Relating to Insurance Agents and Adjusters
    • HB 725 (Hagar)
      • This bill didn’t receive much attention during session, but it certainly affects all adjusters. The bill substantially revises the Licensing Procedures Law for insurance agents, adjusters, and limited lines licensees. It creates the new licensure classification of all-lines adjuster to replace the current licensure classifications of independent adjuster and company employee adjuster. The classifications of independent adjuster and all-lines adjuster are converted to appointment types for licensed all-lines adjusters.
      • HB 725 substantially revises the continuing education requirements for licensees. Each licensee will be required to complete a 5-hour update course every 2 years. The bill also revises licensure provisions related to a number of limited insurance licenses. We will cover the effects of this bill in greater detail in future posts.
  • Non-binding act relating to the Sarbanes-Oxley Act
    • SB 1822 (Oelrich)
      • This bill is a non binding act to urge the United States Congress to repeal the Sarbanes-Oxley Act of 2002 and has no effect whatsoever.

The tremendous pushback the Legislature received following the passage of Senate Bill 408 in the 2011 session played a large part in this year’s relatively quiet political season. In a year where every legislator faces reelection, only the most ardent pro-insurance lawmakers dared to put their necks on the chopping block. That’s the beauty of accountability. Unfortunately, not everyone in Tallahassee answers to the taxpaying citizens of Florida. As we witnessed in recent news reports, the insurance industry has a very cozy relationship with the body tasked with regulating their actions.

Just this week, it came to our attention that the Department of Financial Services has decided to change the administrative rules governing ethical requirements of all insurance adjusters. Among other head-scratching changes, the new rules exempt the insurance industry’s adjusters from a requirement to act with dispatch and due diligence.

The regular legislative session may be over, but our fight continues. We need to let the Department of Financial Services know that these rules ARE NOT consumer friendly and will only act to delay the rightful payment of legitimate insurance claims.

Sunday, we’ll look at those bills we narrowly dodged and might very well see again next year.