“Frozen”…..Really?
Those of us who are movie buffs certainly recognize the term “Frozen” from the recent, very popular Disney move and the VERY popular hit song from that movie with the same name. So, on Friday, April 25 when the Senate President Pro Tempore, Sen. Garrett Richter (R-Collier/Lee) announced to the Senate chamber body that the voting machine was “frozen”, we had to stop and chuckle at the reference. Just before that announcement he mentioned it was cold in there and we can only assume that is what caused the “frozen” state of the machine’s mechanics. We folks in Tally don’t experience much frozen anything and our ever so focused Senators certainly didn’t let a frozen voting machine stop their progress. It was back to the task with manual votes, a very short hiccup in the process, and a reminder of the fortitude of our Legislative body. They carried on with grace and determination.
It WAS a wild and crazy week as the work explodes toward the finish line. Here is a recap of last week’s action.
FIGA Measure Creating Fairer Process for Consumers Nearing Final Approval
Friday 4/25/14- For the second year in a row legislation that could provide common sense and fairness driven reforms to the manner in which the Florida Insurance Guaranty Association (FIGA) handles and collects its funding assessments is alive and moving here at session’s end. The bill establishes a much fairer and uniform assessment percentage to be collected from policyholders; authorizes FIGA to use a monthly installment method for collection of assessments from insurers in addition to the current pay and recoup method; and streamlines the reconciliation of collections. The measure also eliminates a regulatory (rate) filing with the OIR. Unfortunately, last session politics got in the way and the bill could not reach final passage. This session the picture is somewhat brighter and the FIGA measure is now embedded within HB 375, a non-controversial countersignature bill sponsored by Rep. David Santiago (R-Volusia). This morning the Senate passed HB 375 on 3rd reading and the bill has been sent back to the House for concurrence with this final version of the bill.
We fully anticipate the bill’s final passage before session ends next week and we’ll keep you updated.
House Moves Flood Insurance Legislation Closer to Final Passage
Friday 4/25/14- After a lengthy question and answer period and then considerable floor debate on an adopted strike-all amendment, the House of Representatives approved and rolled over to 3rd reading SB 542 by Sen. Jeff Brandes (R-Hillsborough/Pinellas), making it now the official flood insurance bill of the Florida Legislature. This action by the House answered critical questions by many on how leaders of the two chambers would resolve a major philosophical disagreement regarding consumer choice. As we reported in an earlier newsletter, SB 542 was passed by the full Senate on March 26th and sent to the House via messages. The Senate’s bill contained a provision that would allow consumers to purchase flood insurance up to the amount of their outstanding mortgage, a provision strongly opposed by House leaders. In addition to this issue, the Senate bill contained a few other provisions providing consumers with more choices in the purchase of coverage. On Friday when the House took up SB 542, Rep. Ed Hooper (R-Pinellas) who sponsors the House companion bill (HB 879) immediately explained his strike-all amendment which replaced all language in SB 542 with the language contained within his companion measure, HB 879. By the filing of this strike-all amendment the House and Senate announced that they had come to an agreement on a number of issues concerning flood insurance, most importantly, the disagreement over consumers insuring only up to the outstanding balance of their mortgages. During debate on the amendment Rep. Matt Gaetz (R-Okaloosa) strongly supported the Senate version of the bill and argued passionately against taking away a consumer’s choice to insure only up to the outstanding mortgage amount. Even so, after considerable floor debate the strike-all amendment was adopted and the bill rolled over to 3rd reading. We fully expect the House will give the bill its final approval early this week and then send the measure back to the Senate where the upper chamber will vote for final legislative passage. We’ll keep you updated on developments in this final week of session.
Senate Insurance Omnibus Bill Passes Senate Appropriations Committee and Placed on Special Order Calendar; House Bill Sits in Senate
The very large and multi-faceted SB 1260, sponsored by Sen. Jeff Brandes (R-Hillsborough/Pinellas), moved through the Senate Appropriations Committee on Tuesday, 4/22 with a unanimous vote and on Friday, was placed on the Senate special order calendar for Tuesday, 4/29. The companion bill, HB 565, sponsored by Rep. David Santiago (R-Volusia) reached final passage on the House floor back on April 3, and currently sits waiting for the Senate to move. You may recall that these bills have garnered a good deal of interest throughout the session, most specifically due to the provision in the bill that gives DFS additional authority to regulate mediators, navigators, and sinkhole neutral evaluators. We will be watching to see how these two bills will move considering the House version has been in queue without movement. Stay tuned.
DFS Insurance Agent and Agency Services Bills Become One
Wednesday, 4/23/14 – Senate Bill 1210, sponsored by Sen. Aaron Bean (R-Nassau/Duval), coming out of the Senate Banking and Insurance Committee, was heard by the Senate for the 2nd time and referred to HB 633, the House companion bill sponsored by Rep. Clay Ingram (R-Escambia). Among other things, this bill contains some major changes to Florida’s insurance agency licensing laws, including making agency licenses perpetual and repealing the requirement that branch agency locations operating under a parent’s FEIN number be licensed. There is also a provision that will allow true sole proprietorship agencies to forego agency licensing all together. This measure has moved cleanly and swiftly through the legislative process from the beginning and has been fully supported by the agent trade associations. Without debate on Friday, 4/25, it was read for the 3rd time by the Senate, passed with 38 yeas and 0 nays, and immediately certified and enrolled. We expect this bill to be signed by the Governor and become effective on 7/1/14 as proposed. This is one, we believe, we can “put to bed”. For a review of the bill as enrolled, click on the following link: HB 633
Workers’ Compensation Stop Work Order Bill Placed on Special Order Calendar
Last week on both Thursday, 4/24 and Friday, 4/25, SB 444, sponsored by Sen. Bill Galvano (R DeSoto/Glades/Hardee/Charlotte/Highlands/Hillsborough/Manatee), which revises the requirements for the release of stop-work orders moved through the process. On Thursday, it was heard by the Senate Appropriations Committee and passed with a vote of 18 yeas and 0 nays. Then on Friday, it was placed on the Senate special order calendar for Tuesday, 4/29. This bill has been supported all along by the DFS Division of Workers’ Compensation, Florida’s business community and the industry. With the changes in how stop work orders are handled, the passing of the bill should enable employers to continue to provide the services of their business, even while addressing the requirements of carrying workers’ compensation coverage on their employees. The bill will not eliminate the requirement for the coverage, but will enable the employer to respond to the DFS requirements more quickly. This is a good bill for keeping our Florida businesses up and running, while making sure those businesses comply with the workers’ compensation laws of the state. We see no reason that this bill won’t continue to move easily to adoption and signature by the Governor.
WC Retrospective Rating Bills Moving Quickly Forward Also
The Senate and House bills containing the language that allows revisions to s. 627.062, F. S., which governs the way retrospective rating options can be utilized when calculating workers’ compensation policy premium, have been easily winding their way through the legislative process this session. On Thursday, 4/24, SB 952, sponsored by Sen. Wilton Simpson (R-Hernandez/Pasco/Sumter) was laid on the table and the Senate instead took up the House companion bill, HB 785 sponsored by Rep. Ben Albritton (R-DeSoto/Hardee/Polk). The Senate then placed the bill on the 3rd reading. On Friday, 4/25, with a vote of 38 years and 0 nays the Senate gave its final approval to HB 785 and immediately sent the bill back to the House. The House gave the bill final passage and ordered it enrolled. As with the DFS Agents/Agency bill above, we expect HB 785 to continue to move to the Governor’s desk for signature. For a review of the bill as enrolled, click the following link: HB 785
Lawmakers Grant Final Approval to Measure Protecting Gun Owners
Tuesday 4/22/14- The Florida Legislature has given its final blessing to SB 424 sponsored by former Senate President Tom Lee (R-Hillsborough), a bill heavily supported by the National Rifle Association and Unified Sportsman of Florida. By a 74-44 vote in the Senate, this legislation makes it a violation of Florida’s Insurance Unfair Trade Practices Act if insurers are found to be discriminating against firearms and ammunition owners in the purchase or renewal of personal lines homeowners or automobile insurance policies. During this session’s committee process opponents have referred to the measure as a “solution looking for a problem” because proponents have had a difficult time demonstrating situations where gun owners have been subjected to this type of discrimination by insurers. However, proponents have been able to cite one or two such occurrences and have said they are being proactive to curb a practice before it takes hold. Protecting gun owners’ rights has always been a popular topic for Florida’s legislature and even more so during election years. The bill now heads to the Governor’s desk for his action.
After Spirited Debate Senate Passes Bill Raising Highway Speed Limits
Thursday 4/24/14- The full Senate has passed SB 392 co-sponsored by Senators Jeff Brandes (R-Hillsborough/Pinellas) and Jeff Clemens (D-Palm Beach) that could increase the posted speed limit to 75 mph on Department of Transportation (DOT) designated stretches of state roads, where drivers would be allowed to approach 80 mph with minimal fear of being ticketed. The passage came, however, only after significant floor debate prompted largely by female members of the upper chamber. Citing numerous safety concerns and the potential impact on tourists and others who need to drive more slowly, around ten Senators questioned the logic and propriety of passing such a measure. For example, Sen. Arthenia Joyner (D-Hillsborough/Manatee/Pinellas) argued that allowing speeds to be increased could become problematic for many of the state’s seniors and tourists who are not accustomed to the higher speeds. “Slow down, Senate,” Joyner said. “Let’s not increase the speed. This is a safety issue. The faster you go, the more lives are in peril, and you don’t get there but maybe 10 seconds, or more, faster than the person driving the speed limit.” Sen. Audrey Gibson (D-Duval) added thatincreasing the maximum and minimum speed limit will only “encourage all drivers to drive faster, whether they want to or not.” “We’re a tourist state and we want people to slow down and not speed up,” Gibson said. Bill sponsors Brandes and Clemens countered with scientific data indicating that the lowest number of fatalities and the safest speed limits occur when limits are set by assessing the speeds at which 85 percent of motorists travel. The data clearly resonated with the majority of Senate members when the measure passed by a 27-11 vote. The bill’s companion [HB 761 by Rep. Patrick Rooney (R-Palm Beach] has cleared its committees of reference and could be heard on the House floor when desired by leadership.
$3.1 Billion Reinsurance Plan for 2014 Approved by Citizens’ BOG
Thursday 4/24/14- The Citizens Property Insurance Corporation Board of Governors has approved a $3.1 billion risk transfer plan for the 2014 Atlantic hurricane season. With this plan Citizens has raised its reinsurance protection by nearly 70 percent from previous levels while still anticipating growth in 2014 surplus of roughly $600 million. After these new risk transfer transactions are closed, Citizens will have about $3.1 billion in reinsurance available in the event of a major storm or series of storms this hurricane season. “Essentially, in the last three years, we have reduced the risk to our taxpayers of an assessment by more than $9 billion, or approximately 80 percent”, noted Citizens Board Chairman Chris Gardner. The two-pronged risk transfer package includes a total capital markets risk transfer of $1.75 billion in catastrophe bonds issued by Everglades Re Ltd., a Bermuda-based company. The 2014 issuance of $1.5 billion is the largest single catastrophe bond issuance in history. The 2014 transaction is the third transaction with Everglades Re in the past three years, including an outstanding $250 million catastrophe bond issued in 2013. Unlike previous capital market risk transfers, which were structured for single events only, the 2014 transaction provides coverage on an annual aggregate basis over the next three years, protecting the state-run insurer from multiple smaller storms. Citizens has also bolstered its participation in the traditional reinsurance market with the expected purchase of approximately $1.3 billion in coverage for the 2014 hurricane season, including approximately $750 million that covers aggregate losses in the event of multiple storms. The risk transfer package further reduces the burden on all Florida policyholders who may be assessed if Citizens exhausts its ability to pay claims. For 2014, assessments in the event of a 100-year storm would be approximately $2.4 billion, a nearly 80 percent decrease from the $11.6 billion assessment risk three years ago. The reinsurance package will cost Citizens approximately $300 million in 2014, roughly equal to the amount spent in 2013 for $1.85 billion in reinsurance coverage. The cost savings is brought on by sustained global interest in catastrophe bonds and Citizens’ continued efforts in these markets. The Everglades 2014 catastrophe bond was priced at a rate on line of 7.5 percent, less than half the 17.75 percent charged for the first Everglades bonds issued in 2012. Chief Financial Officer Jennifer Montero led a negotiations team with the support of Citizens Chief Risk Officer John Rollins. Following the transactions, Citizens will enter the 2014 hurricane season with the ability to pay all claims in the event of approximately a 70-year storm without the need to assess policyholders.
Seems Like Only Yesterday
Where did the days go? With the blink of an eye, we have moved from the committee weeks in the Fall to the last week of the 2014 Legislative Session. We know, as you do, that there is much, much more work that is done than committee weeks and the general session to constantly stay on top of the issues of our great state. We work 365 days a year, trying to cover all the bases we can for our friends, clients and those who love our beautiful state. We are sure there is no other place to live and work than Florida and we are DETERMINED to do all that is possible to keep the best place to live for you and for us. This week will be the icing on the cake as we watch very closely to see what all the hard work has produced. We will be ON-POINT this week, as always and keep you constantly apprised of how it goes!
Stay tuned and stay in touch….we’ll keep you posted.
There for you….Lisa and the LMA team!
