S 408 Debate in the Florida Senate

The Senate Insurance Committee just adjourned for a second time without voting on S 408, this year’s insurance bill. Chairman Garrett Richter had planned to move the bill out of committee today, but the other Senators seemed moved by public testimony from an enlisted man and his wife from Pasco County and two FIRM members who traveled from the Keys.

Hearing the problems these people were having motivated the Committee to allow more comments and more debate next week.  This means there will be time for Sen Fasano’s other 9 amendments and lots of public testimony at the next meeting, probably in one week, next Monday, Feb 14^th.

It’s interesting that major legislation can be voted on when the Legislature is not even in session. I think they like to keep controversial stuff out of sight, and Committee weeks are usually only attended by professional lobbyists, creating a cozy situation, if you will.

During the hearing, Senator Fasano said that he knew all his amendments were “preordained” not to pass because of “orders” from leadership. Sen. Negron (R – Palm City) denied this, but he has voted against every one of Fasano’s amendments. Fasano is doing a great job of pointing out the problems with the bill – that no insurer will cover sinkholes if it passes. He has proposed many fixes to problems, but they fall on deaf ears.

The enlisted man testified that he had attempted to obtain insurance from Citizens, but that Citizens would not include sinkhole coverage. Sen. Bennett seemed puzzled at this, and commented he didn’t think Citizens could turn anyone down. That implies he expect everyone in sinkhole areas to end up in Citizens, as consumer advocates are predicting. Do the Senators really intend for the state government to take on all sinkhole risk? And if sinkhole coverage is extremely limited, as suggested, then homes will not be repaired, and local governments will be stuck with the abandoned homes.

While consumers have few supporters on this committee aside from Fasano, Sobel, and maybe Margolis, it did appear that Vice Chair Chris Smith (D – West Palm Beach), who seems to usually vote with the insurance companies, might be weakening a bit and responding to the emotional testimony. People should call his office. Unfortunately, Sen. Margolis doesn’t seem engaged on the bill. Since she is a former Senate President, I would think she could put up quite a fight if she wanted to. Maybe not.

The rest of the Senators are dead set against consumers. Committee Chair Garrett Richter has a banking background and admits he doesn’t understand insurance.

The most outspoken advocate for the insurance companies is JD Alexander, the rich grandson of Ben Hill Griffin Jr, who was on the Forbes 400 list of the wealthiest Americans. Ironically, Griffin was a Democrat, but JD is hard core pro-business Republican.

JD accused Fasano of running amendments “written by a plaintiff’s attorney”. If you know Fasano, you know that would never happen. JD accuses consumer advocates and their allies of “running the insurance companies out of Florida” but cites no evidence of this, and accuses consumer advocates of overstating and demonizing insurance company profits.

Let me cite a source on insurer profits, McKinsey & Co, one of the nation’s most respected consultants. In their report, “The Next Frontier in Property and Casualty Insurance”, McKinsey said that “from 2003 through 2009, the U.S. Property & Casualty industry produced $99 billion of pre-tax earnings in excess of cost of capital, reversing a cumulative loss of $108 billion from 1988 through 2002.”

So they’re doing better than ever and I think we know why: their models are flat out wrong.

As to JD’s claim that insurers are leaving Florida, OIR says we currently have 173 insurers, and Florida is the #1 market for homeowner’s insurance even though we are the fourth largest state. How many insurers are going to leave the largest market?

If you want to give anyone a hard time on this bill, call JD Alexander at 1-800-444-9747.