Lawmakers are looking at roofing claims, lawsuits, reinsurance

Jim Saunders Florida News Service

Going to a special session next week to review the state’s troubled property insurance market, lawmakers said Friday night that they would focus on issues such as roof damage lawsuits, litigation and reinsurance.

The House of Representatives and the Senate have released plans for bills for the session, which Gov. Ron DeSantis named after lawmakers failed to reach an agreement on changes to insurance during this year’s regular session.

“I believe that the legislation I will submit to you during the special session will address many of the issues that lead to the instability of the current property insurance market in our state,” wrote Senate Banking and Insurance Senator Jim Boyd, R. Bradenton. . memo to senators. “The proposal balances fair costs and consumer protection while adding smart protective fences for insurance companies against frivolous litigation and fraudulent claims that raise rates for everyone.”

In a note to House members, House Speaker Jay Trumbull, a Republican from Panama City who played a key role in the talks, said the legislation would include “policies that we believe will help curb market abuse without creating unintended consequences. . In drafting this legislation, we have worked to balance the interests of stakeholders in the Florida insurance market, ensuring that the consumer remains paramount in the conversation. ”

The outlines indicated that much of the legislation would address claims for roof damage. Insurers accuse questionable, if not fraudulent, claims of roof damage in increasing costs.

The outline says the law will partially allow insurers to claim deductibles for roof damage, which the Senate has sought in the past. In addition, the law will deter insurers from refusing to issue or renew policies due to the age of the roofs. They will not refuse to write or renew policies if the roof is less than 15 years old.

Insurers have also long blamed litigation for problems in the industry. The legislation, in part, would impose additional restrictions on what are known as “contingency multipliers” that could significantly increase the fees paid to lawyers representing policyholders in insurance disputes, according to capes.

The legislation also provides permission for $ 2 billion to expand insurers’ access to the Florida Hurricane Disaster Fund, a government program that provides relatively cheap reinsurance. The plans of the House of Representatives say that participating insurers will have to lower rates for insurers to reflect savings.

Many insurers need to enter into reinsurance contracts before June 1 and are struggling to find critical backup coverage. Industry officials say global reinsurers have increased prices and limited the amount of coverage they sell in the Florida market.

“Rubber meets the road for many carriers on June 1,” said Kyle Ulrich, president and CEO of the Florida Insurance Agents Association, during an online event hosted this week by rating agency AM Best.

During the regular session, the Senate wanted to be more aggressive in trying to support the insurance industry, while House Speaker Chris Sproules, R-Palm Harbor, said changes adopted in 2021 needed more time to work.

But problems in the insurance market continue to grow, and three carriers – Lighthouse Property Insurance Corp., Avatar Property & Casualty Insurance Co. and St. Johns Insurance Co. – were declared insolvent and brought to court in February.

In addition, on May 13, the State Department of Insurance Regulation approved an agreement that would result in FedNat Insurance Co., Maison Insurance Co. and Monarch National Insurance Co. 68,200 policies will be abolished. Three insurers are part of one holding company.

As a result of market problems, thousands of policies a week came to the state property insurance corporation, which was established as the insurer of last resort. As of the end of April, citizens had more than 851,000 policies, and their number is expected to exceed 1 million this year.

Source link