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Fla. House kills Citizens depopulation measure

Brent Kallestad, Associated Press

TALLAHASSEE, Fla. (AP) -- A bill that would have allowed pricey, largely unregulated out-of-state companies to remove homeowners' insurance policies from Florida's state-backed insurer appeared doomed Tuesday after its sponsor said there's not enough time to reach agreement before lawmakers adjourn Friday.

The House of Representatives wouldn't agree to amendments added to its bill (HB 245) Monday by the Florida Senate and indefinitely postponed further debate on the measure.

"We're finished with it for this year," said Rep. Jim Boyd, who sponsored the legislation. "At this point it's a little late in the game to try to get anything reinitiated."

Gov. Rick Scott, who has pushed for depopulating Citizens, said he was disappointed with the bill's apparent demise.

"If we have a major hurricane and there's not enough money in Citizens, it's a real problem," Scott said Tuesday night. "Citizens doesn't have the surplus it needs to, so we've got to figure out how to make it do what it was intended to do: We need to make it the insurance company of last resort, not the insurance company of first resort."

The main intent of the legislation was to allow surplus-lines companies to take policies out of Citizens Property Insurance Corp., the state-backed insurer of last resort that has instead grown into the state's largest insurer with more than 1.4 million customers.

House members, however, disagreed over requiring insurers to get the signature of every consumer who is switched from Citizens Property Insurance Corp, or giving the consumer the right to opt-in rather than being cherry picked.

Rep. Frank Artiles, a Miami Republican who wanted the signature requirement, said making companies get signatures would provide people the opportunity for an informed choice.

"The question is simple," Artiles said. "Would you rather place the burden on an insurance company to obtain a signature, or shift the burden to an elderly constituent?"

"The refusal to even pursue the more transparent bill proves that these predatory surplus lines carriers just wanted an unfair stimulus of policyholders without regulation," said Sean Shaw, a self-described consumer advocate and founder of Policyholders of Florida. "Policyholders can now see exactly what this was always about — not the fair, reasonable depopulation of Citizens, but money and the backdoor deregulation of our insurance market."

Scott has contended that the company's rates are artificially low, which could leave nearly all Floridians on the hook if a major storm hits the state. Citizens can assess not only its own customers but those of other insurers providing a variety of coverage, including automobile policies, to make up its losses.

Lawmakers have tried for years to shrink Citizens in hopes of reducing the insurer's market exposure and the commensurate risk to millions of Floridians. And now it looks like they'll be doing it again next year.

"Hopefully next year maybe we can relook at it and kind of listen to what we've heard and perhaps view it from a different angle," Boyd said.

The Senate passed the bill on a 26-8 vote just a few hours earlier Tuesday before bogging down in what one senator called "bare-knuckled politics" during hours of debate on reforming the state's personal injury protection law.

Sen. Garrett Richter, who shepherded says changes to the proposal have made it less attractive for surplus line carriers to remove policies from the Citizens Property Insurance Corp. Citizens is Florida's largest property insurer of homes and businesses with more than 1.4 million customers.


Associated Press writer James L. Rosica contributed to this report.