A bill brimming with enticements for the private property insurance industry — and forcing homeowners to pay higher rates to reinvigorate a tepid market — passed its first committee in the Florida Legislature on Thursday.
The proposal, SPB 7018, is a massive insurance reform effort that targets state-run Citizens Property Insurance Corp., but also includes costly side effects for homeowners with private insurers.
Sen. David Simmons, R-Altamonte Springs, who chairs the Banking and Insurance Committee and is backing the bill, said it went a long way toward reducing Florida’s exposure and shrinking government-run insurance.
“No longer will Citizens be undercutting private insurers in the state of Florida,” he said.
Consumer advocates — who say the bill will certainly hike rates on Florida’s homeowners — complained that the committee took only a few minutes of public comment before voting on the massive bill.
Bill Newton, executive director of the Tampa-based Florida Consumer Action Network, said he was “appalled” by the most anti-consumer process he’s seen in many years of lobbying in Tallahassee.
“If we were getting heard that would be one thing,” Newton said. “But you don’t even get a chance to talk. Hardly anybody did.”
Several proposals within the bill allow insurance companies to jack up rates higher and faster, while giving them access to Citizens’ $6 billion cash surplus and the company’s most lucrative policyholders, who would be kicked out of state-run insurance.
The following proposals in the 78-page bill could hit homeowners’ pocketbooks when they renew their insurance policies in 2013 and 2014:
The bill passed 11-1, with Sen. Jeff Clemens, D-Lake Worth, opposing the measure.
The vote showed rare agreement on what has been a contentious issue in the past. Insurance reform proposals are politically difficult in the Florida Legislature, where Democrats and coastal Republicans have joined together in recent years to kill proposals that would raise insurance rates on vocal voters.
The proposal still must navigate its way through both the Senate and the House before reaching Gov. Rick Scott’s desk.
Scott said he had not read the bill, but railed against Citizens’ top management for giving out large pay hikes and inappropriate spending with the corporate credit card.
“They need to be held accountable,” he said. “Right now, I’m very disappointed in what they’ve done.”
Tampa Bay Times reporter Jeff Harrington contributed to this article. Toluse Olorunnipa can be reached at tolorunnipa@MiamiHerald.com.