The proposal, which swept through the Florida House last month, aimed to downsize the mega state-run insurance carrier by transferring some of its policies to secondary “surplus lines,” which aren’t controlled by the Office of Insurance Regulation like the state’s primary carriers, as I reported in my previous story.
Although most House lawmakers supported the bill, it also drew strong opposition for some industry stakeholders who fear it would open the floodgates to companies that have no barriers when upping rates on unsuspecting policy holders.
The Senate ultimately caved by revising the legislation this week, and Boyd (pictured) declined to move forward with the amended version because it stripped the bill of its primary intent, according to state records.
He says the measure ultimately is essential to restoring competition and protecting customers now covered by Citizens -- a financial ticking time bomb.
“The size of Citizens is a huge financial burden hanging over every Floridian’s head,” said Boyd, who also owns an insurance company. “One day we’ll have to pay for it.”
Under the bill some Citizens policy holders will be automatically passed onto surplus lines unless they opt out within 30 days. The new coverage must be similar to what’s currently provided by Citizens, and consumers unhappy with their new carrier can return at any time.
Surplus lines looking to pick up new policy holders also must carry at least $50 million in surplus capitol, a strong industry rating and enough resources to survive two hurricanes, the measure states.
Opponents argue that’s not enough.
“This is a bad bill,” said Sean Shaw, founder of Policyholders of Florida, an industry watch association. “A lot of people will get this notice in the mail, and because of all the negative attention about Citizens, they’ll think it’s a good thing. Then, when it comes time for a new policy, the rates will go through the roof. These are very dangerous deals. I don’t think people know what they’ll be signing.”
It's unclear if Boyd plans to introduce the measure again next year.
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