The Florida Legislature just convened its second special session of the year tackling property insurance.

The special session comes after eight insurance companies entered receivership in Florida since 2019, five of them during 2022 alone, according to the Florida Office of Insurance Regulation (OIR).

Following a special session in May ahead of hurricane season that failed to lower rates for homeowners and acted as a $2 billion bailout for the insurance industry, Florida’s property insurance market has continued to collapse.

It also comes after two successive hurricanes, Hurricanes Ian and Nicole, struck Florida’s west and east coasts this fall. In the wake of these hurricanes, property insurance rates are expected to increase by as much as 40% throughout the state, which will be a devastating price hike for Floridians who are already paying more than three times the national average for premiums and have seen their bills balloon by 112.8% since 2019.

This November’s midterm elections saw Republicans make gains in the Florida Legislature, where they now hold a supermajority in both chambers. This means that while Democrats may introduce legislation or add amendments, their power is greatly diminished. It is the leadership of the Republican Party who are in the driver’s seat on property insurance reforms in Florida.

Legislation Introduced on December 9:

The Florida Senate and House released the bill language for this special session on Friday, December 9. The three bills released by the Republican leadership focused on property insurance, disaster relief and toll relief:

House Bill: Senate Bill:
HB 1A – Property Insurance Senate: SB 2-A – Property Insurance by Sen. Boyd
by Reps. Leek, Rommel by Sen. Boyd
HB 3A – Disaster Relief SB 4-A – Disaster Relief
by Reps. McClain, Leek by Sen. Hutson
HB 5A – Toll Relief SB 6-A – Toll Relief
by Rep. Busatta Cabrera by Sen. DiCeglie

House Democrats also introduced a couple of bills, including one bill by House Democratic Leader Fentrice Driskell, but it was ruled out of order the same day it was filed.

What’s in the legislation:

While we’ll have more analysis of the property insurance bill in the coming days, here are a few key points about this 105-page piece of legislation:

  • It creates a brand new government agency called the Florida Optional Reinsurance Assistance Program (or FORA), which is essentially a taxpayer-funded “insurance for insurers”;
  • It puts additional taxpayer money into the Florida Hurricane Catastrophe Fund;
  • It reduces the number of ways consumers can file lawsuits and the types of fees attorneys can collect on property insurance cases; moves more disputes over property insurance claims out of public courtrooms and into private “binding arbitration”;
  • It allows state-backed Citizens Property Insurance Corporation to raise its rates and allows Citizens more leeway in removing consumers from its coverage; allows Citizens to mandate its residential customers purchase flood insurance;
  • The Office of Insurance has increased regulatory oversight over insurers after a hurricane;
  • The state-backed insurer Citizens will require policyholders to buy flood coverage to remain in Citizens;

Is this now the era of big-government property insurance?

The headline we believe many Floridians should be focusing on is the move away from a small government mentality to a big government mentality. This bill moves Florida’s property insurance marketplace away from a private insurance marketplace to one that is backed up by Florida taxpayers at several points: through Citizens, through the Florida Catastrophic Hurricane Fund, and through this brand new entity, the Florida Optional Reinsurance Assistance Program. The costs of these liabilities run into the billions of dollars.

The question we all should be asking, and which Floridians For Honest Lending will be posing in the coming days and weeks is: If the Florida Legislature wants taxpayer backstops to the property insurance industry, then shouldn’t they provide more insurance company transparency to the taxpayer?

Where are we today?

As of the evening of December 12, SB 2-A sailed through the Banking and Insurance Committee on a party line vote (9 YEAS – 3  NAYS), and has moved into the Fiscal Policy Committee.

SB 4A Disaster Relief was reported out of the Community Affairs Committee on a unanimous vote. As of this writing, it is in the Fiscal Policy Committee.

SB 6-A was referred to the Fiscal Policy Committee and was on the agenda for 12/12/22.

In the House, all of the companion House bills are scheduled for hearings on Tuesday, December 13 in various committees.

Stay tuned for more updates in the coming days.