Despite tension, insurance talks go on

By Tom Zucco
Published January 20, 2007

TALLAHASSEE - Negotiations over plans to ease Florida's property insurance crisis nearly broke down Friday night when frustrated state senators threatened to withdraw all their previous concessions in the face of little movement by the House.

But the tension broke slightly after a brief recess, when the Senate said it would come back this morning to hear additional House concessions. The two chambers have tentatively agreed to roughly one-third of the 81 proposals under consideration, but have yet to tackle any of the major differences that divide their competing plans.

"We thought that we were being hinted to, to basically start over," a weary Sen. Bill Posey, R-Rockledge, the Senate's lead negotiator, said Friday night after nearly 12 hours of negotiations. "But ... I've been assured the only reason we haven't seen any movement is they ran short on time."

Still unresolved, with three days left in the session, are items that could bring substantial and immediate rate relief. They include cutting rates for Citizens Property Insurance by letting it run more like a private insurer and allowing private insurers more access to cheap state-backed reinsurance.

The House and Senate also disagree on whether to ban Florida-only subsidiaries of national insurance companies, the so-called "pup' companies.

The House wants no new subsidiaries starting next year; the Senate thinks that's a bad idea.

Lawmakers have essentially agreed to freeze rates for Citizens' 1.3-million customers. But in dispute is a proposal by the Senate to authorize Citizens to write multiperil policies in its high-risk account. Citizens says that if that happens, its rates would be close to 10 percent lower than 2006 levels.

And still unclear is whether entirely new proposals could still emerge to assure that all Florida insurance policyholders see rate relief, particularly the one-third who buy property insurance from Citizens. Under the current legislation, Citizens customers would enjoy a rate freeze at 2006 levels, but not any rate reduction.

Among the ideas gaining currency among House members, particularly those whose districts are concentrated with Citizens customers: using up to $500-million in state money to subsidize Citizens' reinsurance costs, thereby lowering customers premiums.

"We're trying to find real Citizens relief. That's the biggest issue facing us," said House Minority Leader Dan Gelber, D-Miami Beach. "We need to figure out how to do it."

As lawmakers engaged in a give-and-take Friday, Gov. Charlie Crist called a news conference to remind lawmakers "why we're really here." Perched on easels were letters from homeowners struggling with skyrocketing insurance premiums.

"My husband and I live in a condominium complex and are confronted by the devastating and crushing increases in property insurance and utility rates," wrote Helene Lapointe of Dunedin.

"I just want us to reflect upon and realize that this is affecting real people in a real way throughout the state of Florida," Crist said.

"These people are counting on us to do the right thing, to make sure we give them relief," he said.

Despite the urgency in his voice, Crist said that he remained optimistic about the outcome but that it's important to "remain vigilant."

A joint conference committee is expected to continue to negotiate through Sunday in hopes of the Legislature passing a bill on Monday.

Staff writers Alex Leary, Jennifer Liberto and Joni James contributed to this report.

Fast Facts:

Where they have found common ground


This would require that insurance companies that sell auto insurance in Florida and property insurance in other states also sell property insurance in Florida. But it does not apply to many of the state's largest auto insurers, including State Farm and Progressive.


Requires the state to develop a uniform home grading scale, from A to F, to grade a home's ability to withstand a storm.


Starting in October, insurers would have to tell state regulators how much they will lower deductibles for mitigation measures, meaning a policyholder's deductible would be lower if a claim was filed.


Legislators are also close on a sinkhole proposal that would allow homeowners to opt out of their coverage.