Loves Me, Loves Me Not
If proposed bills could talk during the April 22-26 week of session, they probably would have said, “Do they love me or love me not”? and we base that thought on many legislative topics we are watching, not the least of which is Senate Bill 718 which eliminates “perpetual alimony” and specifies other provisions in divorce decrees. The governor has until Wednesday, May 1 to sign or veto this bill but Floridians’ support of it so far is 10 to 1. On the issues below, we watched as Senate and House bills were tossed back and forth like barbs between married couples with Senators/Representatives, Republicans/Democrats and every other type of legislative leader group insisting their position was “for the people.” With only one week left till the session adjourns “sine die,” which literally means “without day” or that it adjourns without appointing a day on which it will assemble again for this year, we wonder if there will be irreconcilable differences!
In my organization’s book, we say, it’s “commitment time”! Let’s take a look at the House and Senate acting like a married couple the past week!
Senate Bill 1770 and House Bill 909 Addressing Property Insurance/Citizens Reform
This past week both the Senate and House each took their turns attempting to address the major issues surrounding property insurance reform and changes to Citizens Property Insurance Corporation. Late Thursday afternoon (April 25, 2013), the Senate passed CS/SB 1770 containing numerous amendments filed by bill sponsor, Senator David Simmons (R-Seminole/Volusia). The amendments constituted an extreme effort to address numerous concerns about the bill’s content raised by various members of the Senate with many saying how “inclusive” Simmons had been throughout the senate bill’s progress. The bill as amended and passed out of the Senate headed to the House contained several key changes from its previous version. Those changes accomplished the following:
• Existing Citizens policyholders will be able to remain with Citizens at renewal, regardless of whether private market coverage is available at the same or lower rate.
• If an existing Citizens policyholder is taken out and the new, private market company non-renews within 18 months of take-out, the policyholder is entitled to immediately return to Citizens coverage.
• Removed from the bill — all “Top 20” rating language for new Citizens policies.
• Requires new Citizens policy rates to be actuarially sound except in counties where Citizens writes 75% or more of the wind risks.
• Removed from the bill were all changes to consent to rate where a consumer and a carrier through an insurance agent “consent to” a rate mutually agreed to by the carrier and consumer.
• Allows Citizens to phase in new business actuarially sound rates as they have done with sinkhole coverage. This one single provision could help the bill’s passage because the new business rate indications in south Florida have legislators concerned about rate shock.
• Removes from the bill all changes to the assignment of benefits (more on this below).
One day after the Senate passed CS/SB 1770 the House prepared its own re-write of property insurance and Citizens reform (HB 909), but included additional elements designed to protect consumers. Sponsored by Representative John Wood (R-Polk) and presented on the House floor by Representative Doug Holder, HB 909 included several provisions of SB 1770, including:
1. Setting up a clearinghouse for agents to shop prospective Citizens customers for coverage in the private market;
2. Reducing the maximum coverage level on a home in Citizens from $1 million to $700,000 over three years;
3. Setting up an inspector general for Citizens, and;
4. Eliminating Citizens coverage for new construction seaward of the coastal construction line.
There remain significant differences, however, in the House and Senate versions of this bill. The Senate includes provisions that would allow Citizens to use its surplus to loan money to companies that take out its policies, which the House has so far rejected. The House also added amendments Friday by Representative Mike Fasano ( R-New Port Richey), that prevent customers in the clearinghouse from being shopped to surplus lines companies, and by Representative Jose Felix Diaz ( R-Miami) that allow Citizens customers taken over by a private insurer to re-enter Citizens at the previous rate rather than the “actuarially sound” rate for new customers. Another amendment by Representative Bill Hager ( R-Boca Raton) to allow private companies to charge their customers for their purchase of additional reinsurance coverage to cover any potential shortfall in the Florida Hurricane CAT Fund failed to pass.Irreconcilable differences about Citizens between the House and Senate? You decide!
SB 1832-Insurer Employee Salary Premium Tax Credit
The Senate’s elimination of the insurance industry’s salary tax credit was wholeheartedly rejected in the House Appropriations Committee by a vote of 26-0 during a special meeting of the committee requested by House Speaker Will Weatherford. SB 1832 co-sponsored by Senators Thad Altman and Denise Grimsley would have repealed the premium tax credit and the funds generated (an estimated 220 million, annually) used to roll back vehicle registration fees that were increased by the Legislature in 2009. The Senate “fast tracked” SB 1832 because it had no House companion and Senate leadership was laser focused on its passage in what seemed like an attempt to “punish” the insurance industry. (I can discuss why we say that if you want to). Bottom line is that House Speaker-Designate Steve Crisafulli (R-Merritt Island) designed and passed the amendment to SB 1832 to use funds from General Revenue to gradually roll back the previously increased vehicle registration fees over the next five years beginning this July vs using the elimination of the insurance premium salary tax credit to reduce these fees. The battle over this issue is far from over with Senator Joe Negron, who is rumored to be running for higher office in 2014 saying, “There simply isn’t any justification to continue to write a check for a quarter of a billion dollars to help the insurance industry meet payroll.”
SB 834 Passes – Protects Insurers’ Proprietary Information
SB 834 that would make confidential (not subject to public records laws) Florida insurers’ proprietary business information submitted to OIR passed unanimously Friday, April 26, during Senate floor action. The bill sponsored by Sen. David Simmons (R-Seminole/Volusia), is also critical to the Office of Insurance Regulation’s efforts to maintain its NAIC accreditation. The House is expected this week to pass its version of this bill identical to the Senate version.
Budget
Budget negotiations continue on how to fairly divide the dollars between competing House and Senate $74+ billion dollar spending plans. Some of the major budget issues we’ve been following for you are as follows:
Medicaid Expansion
SB 1842, relating to health insurance makes insurance-regulation changes as part of carrying out the federal Affordable Care Act reducing state oversight in many instances and transferring regulatory duties to the feds (read more below). House members also approved a bill 78-36 (HB 7169), entitled Florida Health Choices Plus program. The bill is the House’s proposed alternative to expanding Medicaid under the federal Affordable Care Act. Backers said that efforts by some to force Florida to take federal money- which this bill wouldn’t do – are short sighted. But opponents said the bill wouldn’t offer any substantive help to those who need coverage. House and Senate leaders have taken different positions to address the Medicare expansion issue and it is certain that the debate will continue all the way up to close of session, and most likely, even after….this may not get resolved by May 3 with House Speaker Will Weatherford, (R-Wesley Chapel) saying that it is ok that the Senate and House are in different places on the issue, and he is hopeful that a consensus will be reached by May 3. He continued that if not, we will continue to work on this important issue for Floridians even after session ends.
Pay Raises for Teachers and State Workers
As of this writing, the House and Senate have not agreed on the $480 million appropriation providing each teacher a $2,500 pay raise. The House wants to tie it to teacher performance with Democrats saying the teacher performance evaluation platform is flawed so that shouldn’t be the standard. State workers, many of whom we work with every day, will receive modest pay raises ranging from $600 to $1400, depending on the employee’s current salary.
College Tuition
Friday night, April 26, House and Senate leaders agreed to a 3 percent tuition hike for our state’s colleges and universities. Saying, “families can’t afford it,” Rick Scott has vehemently opposed tuition hikes saying higher ed institutions should live within their means. Governor Scott has wondered out loud in various forums as to why colleges and universities need the newest of everything and in fact in last week’s cabinet meeting, he made sure that two universities committed to keeping their parking fees flat for 6 years before he would approve a facilities bond issue! The legislature responded to the governor by increasing funding for Bright Futures scholarships and other funding to “offset” the increase. Wise education policy analysts know however that scholarships don’t go to all students while a tuition increase is across the board.
Economic Development Funding
For those of you wanting to start your own businesses, there’s a chance you can apply for and receive economic development incentives. There is about $70 million earmarked for economic development projects in our state (the governor asked for $278 million). We can guide you if interested in following this money.
SB 1842 – PPACA
On Thursday, April 25 during floor action, the Senate passed SB 1842 (Sen. Simmons-R-Seminole/Volusia) regarding the Patient Protection and Affordability Care Act (PPACA) clarifying that federal PPACA regulators will take control over-conflicting provisions within the state’s Insurance Code. It also authorizes the Office of Insurance Regulation (OIR) to conduct market conduct examinations of health insurers to verify their compliance with PPACA requirements and provisions, as well as to refer potential violations to the US Department of Health and Human Services. The bill also grants the Department of Financial Services (DFS) broad authority to license and regulate Federal health insurance “Navigators” who are to provide factually accurate information regarding qualified health plans, the availability of premium tax credits and cost sharing reductions. Navigators may not perform any of the duties of a licensed insurance agent and may not receive compensation from an insurer, health plan, business or consumer in connection with performing Navigator activities.
CS/HB 223 – P&C Policy Forms May Be Posted Via The Internet
On Thursday, April 25, the Senate took up and passed CS/HB 223 (Rep. Larry Lee, Jr. D-St. Lucie and State Farm agent), which will allow property and casualty insurers to post issued policy forms and endorsements to its web site for ease of access by consumers and reduction of mailing costs. The bill was taken up at the request of Sen. Nancy Detert (R-Sarasota/Charlotte), who sponsored the Senate companion, SB 418. It is clear in the bill that forms and endorsements posted on web sites cannot contain any personally identifiable information regarding a consumer. The forms and endorsements posted on the websites will remain for as long as the policies and endorsements remain in force, and must also be posted in a manner that allows consumers to print and save such documents free of charge. Insurers must notify its policyholders that a paper or electronic copy may be obtained from the insurer upon request.
Florida Hurricane Catastrophe Fund
For all intents and purposes, Cat Fund reform is dead – for the 2nd year in a row. There were those that wanted to use the cat fund to help in decreasing the size of Citizens by providing affordable reinsurance to insurance companies who would commit to take “less desirable” Citizens policies out of Citizens. Then there were those who would not budge on this idea and insisted the Cat Fund should not be used to “right size” Citizens. Neither side could come to agreement and therefore, no reform will happen in 2013.
Neutral Evaluators (NEs)
There was a tremendous response to our mention last week of DFS Rule revision 69J-8, FAC, dealing with Neutral evaluators and we are closely following this rule development progress. One of the items we asked was to send us information from neutral evaluation cases that are outside the traditional form the neutral evaluators send to DFS. As one carrier said, it’s not the NE report form that tells the story – it’s the sleight of hand used by NEs who charge exorbitant fees and dupe the system by aligning themselves with nefarious sinkhole professionals. Email us so we can talk further about our conversations with DFS and the abuses they are trying to halt.
Assignment of Benefits
This April 22nd letter is a common story you are familiar with for those dealing with unscrupulous water extraction or water remediation firms. I shared this story with several members of the House and Senate and was told this issue would not be dealt with this year because there were too many other things going on. I have the commitment from most stakeholders to continue to work on stopping the practices we see every day of inflated claims and AOB’s that are a license to steal. Stay close to us on this topic and don’t give up!
So, Do They Love Me or Love Me Not?
Will we get the answers to that question this week? Sure seems there is still a lot to do in the final week of the 2013 Legislative Session. But then again, it seems that way every year this time. We know that we have worked very, very hard to make good things happen for our clients, friends, those who care, and the citizens of our great state. This final week will tell us what bills our elected officials loved or not. But regardless of the final decisions, we will continue to fight the good fight each and every day. We need and appreciate your side-by-side support with and for us.
As Session winds down, we are already working on the big “wrap-up” newsletter that we will provide to you the week after session ends. We want this issue to contain everything you want to know about what happened and when those actions will officially impact us. If you have any “desires of the heart” for information on any specific area, shoot us an email this week and we’ll be sure to include that topic in our wrap-up. Until then, stay tuned and alert!
Warmest regards always – Lisa
