By Mark Friedlander, Director, Corporate Communications, Triple-I

Florida’s Insurance Reform Bills Get Mixed Reviews

In the closing hours of the 2021 Florida Legislative Session on April 30, Florida lawmakers pushed through two high-profile bills focused on significantly changing the policies governing property and auto insurance coverage in the state.

While legislators celebrated the passage of these long sought-after reform packages, insurers and consumer groups had an opposite reaction, as did one key member of the state Senate’s Banking and Insurance Committee.

Property Reform – Senate Bill (SB) 76

Throughout much of the 60-day session, hopes were very high that the property reform package would help solve Florida’s rampant roof replacement and litigation crises. It certainly looked like that would be the case until the final days, when a revised version of SB 76 was introduced that stripped out provisions to restrict attorney fee multipliers and roof age settlements.

A provision that will prevent roofing contractors from directly soliciting business from homeowners was kept intact, but a new amendment would let Citizens Property Insurance Corp., the state’s insurer of last resort, raise its rates in line with the private market – another blow to hard-hit homeowners across the state.

In a LinkedIn post on May 1, Robert Ritchie, President and CEO of Tampa-based American Integrity Insurance Group, slammed the legislation.

“It’s a watered-down bill that does not fully restore market stability,” he wrote. “It does not fully curb rate increases. It does not slow down the growth of Citizens.” Ritchie emphasized that the bill does not solve the real issues impacting the Florida market.

There appears to be nothing in the bill to restrict excessive property litigation being filed against Florida-domiciled insurers, in a state where 76 percent of U.S. property claim lawsuits are filed, according to data from the National Association of Insurance Commissioners. This has been a key driver of rising premiums for most Florida homeowners.

State Senator Jeff Brandes (R-St. Petersburg) who co-sponsored the legislation, voted to pass the bill but said it was only a “40 percent solution for what is needed in Florida to bend the cost curve” He told his colleagues, “Hopefully, it stabilizes rates, but really will ultimately do nothing to actually lower them.”

Senate Bill 76, which passed mostly along party lines in the Republican-controlled Legislature, will become law July 1, 2021, if signed by Gov. Ron DeSantis.

Auto Reform – Senate Bill (SB) 54

Florida’s auto reform package (SB 54) – which eliminates the state’s no-fault personal injury protection (PIP) system in favor of mandatory bodily injury coverage – had no visible support from either the insurance industry or consumer groups as it passed with strong bipartisan votes in the Senate and House.

A recent actuarial analysis – conducted by Milliman in conjunction with the American Property Casualty Insurance Association –indicated SB 54’s enactment would increase premiums for most Florida drivers. The 40 percent of motorists who currently purchase the state’s minimum mandatory liability coverage levels could see their auto insurance premiums increased by over $800 annually, the report indicated. Further, the state’s already high uninsured motorist pool (20 percent), sixth highest in the U.S. according to the Insurance Research Council, could grow substantially as some Floridians refuse to pay more for auto insurance and opt against buying it.

Senator Brandes, one of only three Florida state senators to vote against the legislation, said its sponsors had not done enough to study how SB 54 would affect rates. Some legislators said they based their support on a 2016 analysis from the Florida Office of Insurance Regulation, which showed auto premiums would decline for most drivers if the PIP system were set aside in favor of mandatory bodily injury coverage.

“Florida already has some of the highest rates in the country and unfortunately if you are just struggling to make it… [and] buying just PIP today, your rates will go up 40 percent,” Brandes said.

Immediately following the passage of SB 54, several industry and consumer groups announced they plan to focus on getting Gov. DeSantis to veto the bill, which otherwise would take effect Jan. 1, 2022.



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