House, Senate property insurance bills propose sweeping reforms, including reinsurance funds

Florida legislative leaders work with the governor. Ron DeSantis The administration rolled out a comprehensive property insurance plan Friday night that Republicans hope will stabilize a market where insurers are collapsing and homeowners are being hit by steep interest rate hikes.

While some insurance experts predict only minor adjustments, the House and Senate bills unveiled will make sweeping changes, including the creation of a temporary reinsurance fund that relies on $2 billion in taxpayer money.

But other changes call for a crackdown on lawsuits against insurers while preventing insurers from refusing to renew or offer policies for homeowners with roofs less than 15 years old.

“We believe these policies will help curb market abuse without unintended consequences,” the Rep. said. Jay Trumbull, the Panama City Republican and chairman of the House Appropriations Committee, in a memo to members of the House of Representatives. “In developing this legislation, we worked hard to balance the interests of stakeholders in the Florida insurance market, while ensuring that consumers remain at the forefront of the conversation.”

senator. Jim BoydThe chairman of the Senate Banking and Insurance Committee told senators in a memo that “the proposal balances fair costs and consumer protections while adding reasonable guardrails for insurers to prevent frivolous lawsuits and fraudulent claims push.” Higher interest rates for everyone.”

DeSantis announced in late April that he would bring lawmakers back to the Capitol for a special session to address the ongoing collapse of Florida’s property insurance market. The governor took the step after the Senate and House failed to agree on what to do. House Republicans in particular dislike some of the provisions in the Senate bill that they believe are too burdensome for low-income homeowners.

As the time for the special session draws closer, outside observers are skeptical about the type of reforms actually being considered. But DeSantis promised earlier this week that there would be “significant reforms” and that “we will not accept any very important package that is not good for the people of Florida.”

Four bills were released Friday night, two of which were in the House (HB 1D & HB 3D) and two in the Senate (SB 2D & SB4D), which may raise objections from some insurers and trial lawyers.

Part of the proposal would impose tough new limits on attorneys’ fees associated with property insurance litigation and on so-called “bad faith” lawsuits brought by insurers over property insurance claims.

The legislation also addresses roofing costs, which insurers believe has been a major driver of rate hikes due to unethical roofing contractors. Insurance companies will be allowed to offer policies with a separate roof deductible, but that deductible will not apply to damage caused by hurricanes or trees. Also, no insurance company can refuse to issue or renew a policy because the roof is less than 15 years old.

Another important part of the bill will create a new reinsurance fund – backed by the state – that will provide insurance to insurers. This would allow domestic insurers to enter coverage before being allowed to use the state-established Florida Hurricane Catastrophe Fund.

Insurers joining Reinsurance to Help Policyholders this year will be required to reduce their rates by June 30, 2022 to reflect the savings. Any insurers that join the program next year will be required to reduce their rates in 2023.

“Hopefully we’ll never have to use it, but this additional funding provides certainty that helps stabilize the market,” Boyd said of the new reinsurance fund.

The legislation also creates a new $150 million program that will provide matching financial grants for homeowners who make “home-strengthening” improvements to help their properties withstand hurricanes. Applicants will be able to receive program funding of up to $10,000.

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