Florida Legislative Session Productive for Industry, Lobbyists Claim
Ask insurance industry lobbyists in Tallahassee to describe this year’s legislative session, and they’re likely to agree that it was a “very productive” session.
Lawmakers enacted major pieces of legislation dealing with the Florida Hurricane Catastro-phe Fund, the Florida Workers’ Compensation Joint Underwrit-ing Association, a “Consumer Bill of Rights” and The Affordable Health Care Act.
“This year’s legislative session produced public policy that will help keep the insurance market viable, while attracting new companies,” said Sam Miller, executive vice president of the Florida Insurance Council (FIC).
“We didn’t get everything we were hoping for, but the legislation that did pass will have a positive impact on the health, home, and employer insurance markets resulting in more affordable and accessible insurance in Florida.”
Senate Bill 2488 increases the capacity of the state’s CAT Fund from $11 billion to $15 billion for both initial and subsequent storm seasons, and allows the capacity to be adjusted annually based upon the percentage change in the fund’s exposure from the previous contract year.
The bill also lowers the aggregate insurer retention level from $4.8 to $4.5 billion. SB 2488 increases the assessment authority against an insurer from 4 percent to 6 percent for any single year’s storm and from 6 percent to 10 percent for multiple storm seasons to fund the increased fund capacity. Surplus lines polices will now be included in the assessment base, but medical malpractice premiums will be excluded until May 31, 2007.
House Bill 1251 builds on workers’ compensation reforms enacted in 2003 by providing an immediate $10 million appropriation to the Joint Underwriting Association (JUA) to cover a deficit in sub plan D, which should shield small contractors in that sub plan from assessments.
The bill also reorganizes the current four sub plans into three tiers, and provides for an additional $15 million to cover deficits in 2004 after a review by the state Auditor General.
Another workers’ compensation bill, SB 1926, allows an insurer to seek a rate deviation for a “particular insured” based on underwriting guidelines filed with and approved by the Office of Insurance Regulation.
Chief Financial Officer Tom Gallagher was instrumental in securing passage of a “Consumer Bill of Rights” bill (SB 2038/HB 557). The legislation has several provisions, including one that preserves homeowners’ insurance coverage when a mortgage company fails to pay escrowed premiums.
Another provision clarifies that insurers can’t refuse homeowners’ coverage based on a single previous water claim unless appropriate repairs weren’t completed.
“Thousands of consumers have called my office in the last year saying they feel powerless to protect themselves from their insurance companies,” Gallagher told a news conference when the legislation was signed into law.
“It is fundamentally unfair for consumers to be non-renewed, canceled or to surrender their legal rights with no explanation, or for an insurance company to use incorrect information at the expense of consumers.”
Although industry groups, including FIC, didn’t support every aspect of the legislation, FIC President Guy Marvin said the “legislation ensures that everyone in the insurance community has a model of best practices for addressing consumer concerns, inviting consumers to be more a part of the decision-making process and opening better lines of communication.”
The Affordable Health Care Act (HB 1629/SB 2910) includes measures designed to address the state’s health care access and affordability crisis, including important hospital cost and quality disclosures.
The Florida Agency for Health Care Administration (AHCA) is now required to post price and performance information on the state’s hospitals and outpatient facilities on in a consumer-friendly format on its Web site.
Performance measures will include infection rates, average length of stay, mortality rates, complication rates and re-admission rates. In addition, the legislation gives consumers the right to obtain advance estimates from hospitals and outpatient facilities for any non-emergency procedures, and it also provides a process for individual patients to challenge hospital bills.
Another key feature requires insurers in the small group market to offer high deductible, catastrophic health insurance policies to be tied to Health Savings Accounts recently authorized by Congress.
“We started the year with a commitment to pass legislation that will get much-needed relief for small employers who are struggling to keep health-insurance benefits for their employees and families,” Miller said. “The final legislation that passed will not be enough, but it’s a start that we will continue with an eye toward next session.”
Other bills of interest this session include HB 251, which creates a premium tax reporting database to help collect funds from insurers for firefighter and police pension funds, while HB 1899 provides a process to resolve legal claims related to construction defects arising out of the construction of a dwelling before a lawsuit is filed.
And, SB 2588, an omnibus bill containing several producer licensing amendments, including a provision that implements a recent court decision striking down the state’s counter-signature law.
Details about these bills and other enacted legislation can be accessed at the FIC Web site (www.flains.org).
David Reddick is a state affairs manager for the National Association of Mutual Insurance Companies (NAMIC) who covers the southeastern region of the country.