Step By Step
It’s important that we remember we didn’t get into the insurance chaos overnight and we won’t fix it overnight. It’s a step by step process and this week’s committee meetings confirmed that.
Whether you are in the auto insurance business, are dealing with the national affordable healthcare act, struggling with drug repackaging runaway costs in the worker’s comp world, or property insurance insanity with insurers competing with the government, this week was a good first step in what we hope will be a productive legislative session.
First, I wanted you to see the Governor’s Inspector General Report about Citizens.
The findings start on page 11 but suffice to say it will be hard for Citizens to negotiate international reinsurance when Citizens staffers can’t fly overseas. The Governor has halted all of their international travel and now requiring that they be subject to all state travel reimbursement standards – which equates to less than $30 day for meals as an example. Those of us who know that travel is an essential part of conducting business can sympathize with our Citizens colleagues. We wish them the best.
Second, see notes from the Senate and House Insurance Committee meetings. Also, please review the House and Senate Committee Presentations including the meeting packet for the House meeting and the meeting packet for the Senate meeting.
Here is some perspective for you — all the signals are that the legislature wants to do something – whether it’s to drive down businesses’ worker’s comp rates because doctors are dispensing drugs at outrageous prescription fees driving claims costs or driving more competition because Citizens and the Cat Fund should be used as “leverage” (to borrow a term from Sen Jeremy Ring) to negotiate lower reinsurance costs. Of course, it’s JANUARY and we don’t start the session until March, but this week’s meetings are a sure sign, particularly in the Senate, that we can’t continue on the pathway of what legislators are calling, “bait and switch,” ie, where Citizens sells an insurance policy with scaled back coverage and at the time of claim, consumers can’t fix their house because they don’t have enough money.
Chairman Simmons said, when Democratic Senator Clemmons commented that we can’t ramp up rates and harm consumers,
“Is it good public policy for Citizens Insurance Company to be writing policies that are less expensive, and in the event there is a major cat and there will be a large group of homeowners who can’t rebuild? In this attempt to “cheap out” coverage, no, it’s not the best. Are we, as a matter of public policy, doing the right thing? We have a huge portion of Floridians who have Citizens and that will leave a portion of their homes un rebuilt. The idea to “cheap out” is a bad thing. We need to provide its consumers a quality product – not an illusory product. We will address that and I want to make sure what we do is the right thing. We will run all ideas in the sense of a pro forma. We need to adopt this multi-faceted approach to solve the problem. We need a road map to tell folks we are in the right direction and we have put a value for all ideas.”
Lastly, Demotech released a letter to the Senate Staff and it’s attached for you.
Next week, more meetings, more conversation, step by step! My best and let hear from you! I appreciate each of you always!
