On Friday we talked about the bills that managed to pass through the legislature, but this session, the real story was what didn’t pass. Thanks to a lot of hard work by consumer groups like Policyholders of Florida and a once-in-a-decade political environment that forces all of our state’s non-cabinet elected officials to answer to voters, we managed to dodge most of the insurance industry’s anti-consumer bills.

While it might be appropriate to break out the champagne, rest assured that the industry will be back again next year fighting to enact this same legislation. With that said, consumer groups, policyholders and public adjusters should be proud of what bills didn’t make it to the Governor’s desk.

Here are the bills that we beat, and expect to see again next session.

Bills that Failed to Pass:

  • Citizens Surplus Line Depopulation Bill
    • HB 245 (Boyd) & SB 578 (Oelrich)
      • HB 245 and SB 578 represented the greatest threat to Florida policyholders of the entire 2012 session. These bills would have allowed surplus lines carriers, which are not subject to the same state regulation as admitted carriers, to participate in the Citizens Property Insurance Corporation depopulation program. If implemented, surplus lines brokers would have had the ability to review Citizens policyholder underwriting and claims information, then cherry pick the policies they wish to take off Citizens books, leaving the state run insurance company with an even more risky pool of policies, and Florida policyholders with an unregulated carrier unprotected by the Florida Insurance Guarantee Association.
      • We fought this bill every step of the way, and thanks to a coalition of reasonable Senators, we were able to defeat the insurance industry’s greatest prize of the session. The fight against this bad bill shows just what can be accomplished when consumer groups work together toward a common goal. Here’s hoping it’s one of many to come.
  • Expert Testimony – The so-called “Daubert” bill
    • HB 243 (Metz) & SB 378 (Richter)
      • These bills aimed to bring the state of Florida’s evidentiary standard into line with Federal standard. Under the new Daubert standard, judges would be given more leeway as “gatekeepers” of science. Obviously, there are problems with this standard, as precious few members of the judiciary are trained scientific experts. The bill would have wreaked havoc on the state’s already overburdened judicial system by forcing re-litigation on an enormous scale.
  • Relating to Civil Remedies against Insurers (Bad Faith)
    • HB 427 (Passidomo) & SB 1224 (Oelrich)
      • This bill consistently represents the biggest threat to policyholders every year. If passed, this bill would have made it much more difficult for policyholders to file bad faith lawsuits against their insurers. The law would effectively chip away at the state’s bad faith statutes – statutes that exist to ensure your insurance company is holding up its end of bargain and acting in good faith. Erosion in bad faith laws lets insurance companies evade their contractual obligations and harm policyholders without recourse. Thankfully, a coalition of rational Legislators squashed this one early, but don’t be surprised to see a similar bill next year. It’s the insurance industry’s grand prize.
  • Hurricane Catastrophe Fund Bill Reduction
    • HB 833 (Boyd) & SB 1372 (Alexander)
      • These bills would have reduced the coverage provided by the Cat Fund, which acts a source of reinsurance for Citizens and private insurers, from $17 billion to $12 billion over a five-year period. The bill initially died in committee, but powerful sponsor JD Alexander attempted to sneak it into more innocuous legislation before being rebuked by his colleagues.
  • Relating to Residential Property Insurance
    • HB 753 (Holder) & SB 728 (Ring)
      • HB 753 and SB 728 included various provisions, including eliminating standard policy requirement; revising F.S. 627.4137 relating to disclosure liability coverage; and revising F.S. 627.701 relating to deductibles.
  • Relating to Citizens Property Insurance Corporation
    • SB 1784 (Hays)
      • SB 1784 contained a sizable list of anti-consumer changes to Citizens Property Insurance Corporation, including limiting policyholder eligibility, decreasing coverage, and elimination of the 10% a year cap on rate hikes. Thankfully, it was barely considered.
  • Relating to the Non Renewal of Insurance
    • SB 1248 (Hays)
      • Another terrible bill from Senator Alan Hays, this one provided specified exemptions from the requirement that an insurer provide notification of nonrenewal to an insured.
  • Relating to the Hurricane Discount Mitigation Program
    • SB 1684 (Hays)
      • This bill — another bad bill from Hays — revised provisions relating to the Hurricane mitigation discount program, cut membership to the advisory council, deleted provisions specifying how program funding is to be apportioned, and slashed the Manufactured Housing and Mobile Home Mitigation and Enhancement Program, among other things.
  • Relating to Property and Casualty Insurance
    • HB 4059 (Metz) & SB 1518 (Hays)
      • HB 4059 and SB 1518 would have repealed F.S. 627.3519, which requires FSC to provide annual report of probable maximum losses, financing options, potential assessments of FHCF and Citizens
  • Relating to Property Appraisals
    • HB 761 (Artiles) & SB 1318 (Fasano)
      • Filed by two of the biggest consumer advocates in the legislature, HB 761 and SB 1318 would have required Citizens Property Insurance Corporation to comply with conditions and procedures relating to participation of umpires and appraisers in loss appraisal process. These bills would allow either party to submit a written demand to enter into the appraisal process when an impasse is reached on actual cash value, amount of loss, or cost of repair/replacement.
  • Relating to Property Insurance
    • SB 156 (Fasano)
      • In perhaps the furthest reaching consumer bill filed this legislative session, Senator Fasano’s bill includes provisions that revise the membership of the Market Accountability Advisory Committee of the board of governors of Citizens Property Insurance Corporation to include more representation. The bill would have extended the corporation’s annual rate increase cap to sinkhole coverage, and requires an insurer to accept a private structural appraisal under certain circumstances. Perhaps most importantly, the bill would have required an insurer to pay replacement cost coverage without reservation or depreciation for dwelling losses that result from a state of emergency.
  • Relating to Property Insurance
    • HB 1473 (Burgin) & SB 846 (Fasano)
      • These good bills would have included a number of common sense consumer protections. First, these bills required insurance companies to disclose to their insureds several items, including benefits, time limits and other provisions of a policy that the company may apply to that particular claim. Second, these bills required that insurance companies live up to their own standards of timeliness. If policyholders must present documents in a timely manner, their insurance companies should do the same. Finally, this bill extended the alternative living expenses (ALE) expenses that are provided in a state of emergency to 24 months. ALE expenses are those costs which are incurred when you have to live somewhere else because your home is damaged. This bill would have given policyholders a bit more time in the event of a hurricane – when policyholders should be trying to piece together their lives, not having to worry about arbitrary time constraint.