Can it be true…Only Ten Days and it’s over…or not
While the tea leaves continue to be read, there is STILL so much that needs to be done during general session. Does that mean an extension might be in the future for this legislative session? The action is moving at a rapid-fire pace right now and whether you are following in person or via the internet or television, you better listen hard and close to get it all in. This week promises to move at the fastest of warp speeds!
Citizen’s Reform Legislation (SB 1770)
This larger-than-life massive reform bill made it to the Senate floor on Tuesday BUT, while the bill sponsor, Senate Banking and Insurance Chairman David Simmons (R-Maitland) announced his confidence in the bill’s passage, the vote was delayed due to concerns of whether or not the bill truly had its needed support. Sen. Simmons continues to work with legislators that aren’t totally convinced this is the right bill for reforming Citizens. Sen. Simmons’ complete devotion to getting his bill passed is obvious in his passion to move this forward. “I already have more than the necessary 20 (senate) votes,” Simmons claimed. “I believe in getting consensus and I believe in being able to do something more than skate by with the 21 votes. I want to solve the problem that those who would vote ‘no’ might have.”
One of the concerns for some of the senators that aren’t completely convinced is that the bill would require new policyholders to pay rates in line with what neighbors are being charged by private firms. Simmons also plans to amend the bill section which involves how the new rate structure would affect buyers of new homes. This is an issue that directly impacts his district where he believes his constituents are unfairly “taxed” in order to insure policyholders in the coastal areas.
While the Senate regroups on their direction on Sen. Simmons’ bill, the delay will give legislators a chance to review the House proposal by Rep. John Wood (R-Winter Haven).(HB 835) which is very similar to Sen. Simmons’ bill.
The delay may be a good thing all around inasmuch as the Senate can take a breath and look at the House version and work it all out by the time SB1770 is back on the Senate floor this week. As you all know, the media is “all over everything Citizens,” so be sure we will be “all over the Senate floor debate.”
Business-Friendly Legislation
Last week we reported to you regarding the legislative proposals that will shift the burden of proof away from business folks to state agencies when administrative rules or agency statements are challenged. CS/SB 1696 sponsored by Jeff Brandes (R-Hillsborough/Pinellas) which passed the Senate Governmental Oversight and Accountability Committee on April 16 and CS/HB 1225 sponsored by Janet Adkins (R-Nassau/Duval) passed it’s last committee stop and should be heard on the House floor this week. While this legislation doesn’t have the attention of many of the other subjects of this years’ Session, it IS a very important piece of law for regulated businesses in Florida. Remember that these bills increase the probability of regulatory consensus for regulated businesses in Florida. We will continue to push for this positive development and are hopeful that this may reach final passage this session.
PIP Update
As we reported last week, Senate Banking and Insurance Committee Chair David Simmons (R-Seminole/Volusia) delayed a vote on his own bill (SPB 7152) during April 9th’s committee meeting commenting that he needed time to confer with Governor Scott and House Insurance and Banking Subcommittee Chair, Bryan Nelson (R-Lake/Orange) regarding the PIP reform. This issue may be dead for this Session because the general thinking appears to be to let last year’s HB119 have whatever impact it will on PIP and readdress this important issue in the 2014 session. We make an editorial comment here that many of the legislators are extremely frustrated because they believe they worked hard on the industry’s behalf in the passage of last year’s PIP legislation (House bill 119) and the prior year’s property insurance legislation (Senate bill 408) and expected a reduction in automobile and property insurance rates. The frustration was clearly evident in Senator Thrasher’s comments this week when the premium tax salary credit elimination was debated: “We have done A LOT for the industry recently”, stated Senator Thrasher, which was followed by what appeared to be a sigh of disgust! And at that, the elimination of the industry’s 30 year premium tax salary credit was promptly approved and sent to the Senate floor.
Companies’ Proprietary Information Legislation
The march forward to protect the proprietary information of insurers continued further this week. Last week the Senate version of the legislation (CS/SB 834) sponsored by Banking and Insurance Committee Chair, David Simmons (R-Seminole/Volusia) cleared the Senate Governmental Oversight and Accountability Committee. In addition, the big bills (HB821 and SB836), which specifies the details of the NAIC holding company act, are headed to the House and Senate floors for final passage. To review the staff analysis of each bill, click below.
• Staff Analysis HB821
• Staff Analysis SB836
The Budget
This weekend, budget negotiations will continue with the two chambers working on the details of a $74+ billion dollar budget. There are five main areas that are the most contentious.
- Medicaid expansion. Despite the Democrat’s pleas to accept federal dollars to expand Medicaid, Republicans have refused to do so. The Senate is moving toward a program that allows federal money to be used to pay premiums for private health plans as the alternative to expanding Medicaid. The House wants to use state dollars only to fund health care for a smaller portion of low income citizens.
- Pay raises for teachers. The Governor wants $2,500 pay raises for teachers. The Senate and House agree to the raises, but not necessarily on how they will be awarded. The question is whether they will be flat raises for all or tied to some type of performance/merit standards. So, the money will be there, how it is awarded is still in question.
- College tuition. Governor Scott and the Senate do not support any increases in college tuition; however, the House version of the budget includes a 6% tuition increase.
- Clerks of Court. Clerks of courts budgeting have been an going dispute for years. This year’s budget includes the senate’s desire to retain some control over the budget of the clerks of court while the house wants to keep this out of the state budget altogether, with the clerks self-funding through court fees. This is important to us who rely on the court system to efficiently handle insurance litigation. We need this process to only get better, which means making sure that clerks of courts have the funding they need.
- IT Consolidation. The fight continues to put all 30 state agencies’ IT functions under one agency, created for the purpose of consolidating all IT platforms. The House only wants this agency to have an advisory function while the Senate wants the agency to have full control over the millions of taxpayer dollars spent for state government IT infrastructure. Either way, any move will impact the Department of General Services and its ongoing need to exist. In the OIR/DFS budget, 25% of their total budget is spent on IT costs. This speaks to why this is such an important issue in the state of Florida.
CAT Fund Updates
The issue of extending the medical malpractice premium exemption from CAT Fund assessments continued to be a fire cracker this week. We watched SB1046 (insurance omnibus bill) in the Senate Appropriations and the heat got turned up again with the medical association telling the members that including doctors in the CAT fund assessment base will drive up medical malpractice rates and deter physicians from coming to Florida. Certain legislators, including Rep. Greg Steube (R-Sarasota), said “out loud” in committee, “Why should the farmers of our state be forced to pay this assessment when doctors don’t have to?” This bill appears to be headed to the Senate floor this week.
An overall CAT fund package was approved by the Senate Banking & Insurance Committee (SB1262) this week which reduces the Cat Fund retention to $5 billion; however, this version of the CAT fund bill is only a “suggestion”. In other words, this action will keep the conversations moving toward some type of agreement regarding CAT fund reform. There is some concern that if the CAT fund’s capacity is reduced in the law and we find ourselves in the middle of a catastrophic storm (needing the lost statutory capacity quickly), what mechanism would kick in quickly to restore the monies that we need. This is an important issue, so do stay tuned.
Sinkholes/Neutral Evaluation
The issue of sinkholes and the handling of sinkhole claim disputes continue to be a subject of contention in our state. In February of 2012, DFS held a workshop in St. Petersburg to hear input about and any possible improvements that might need to be made to the neutral evaluator rule. Fast forward to April 2013 when DFS released its proposed draft of the rule changes that many of us worked so hard to accomplish last year.The proposed rule draft and comments are due to [email protected] by close of business Tuesday, April 23. Note: Many of you reached out to me for assistance in the best strategy to prevent neutral evaluation reports that can be used to game the system. One such tactic is for “new information” to be introduced after the report is concluded and sent to DFS. A suggestion was made to DFS to consider that if new information is to be accepted in a revised report, both parties of the claim dispute must agree on the inclusion of the new information and any fees associated with the report update must be borne by the party requesting the revision.
Ten days and Counting
Other topics that we are following include the drug repacking cost impacts on workers’ compensation premiums; further deregulation of property and casualty forms and rates for commercial insurance; increased regulation on insurance company structures/affiliates; assignment of benefits in property claims; the Florida insurance guaranty association; and many other topics that impact what you do every day as you serve your policyholders with integrity and the highest of values. As you have often heard me say, I wish our legislators could truly walk a day in your shoes.
Until next week…
My best always – Lisa
