Sponsor seeks ‘in-depth’ study
By Ron Hurtibise South Florida Sun Sentinel
A bill that would have made windstorm coverage by Florida’s Citizens Property Insurance Corp. available to anyone who wants it has been withdrawn from being considered during the just-started legislative session.
Rep. Hillary Cassel, who filed the 143-page bill in December, withdrew it last Friday on the eve of the session, which started on Tuesday.
During a brief phone interview with the South Florida Sun Sentinel, Cassel said she is “working with the speaker’s office on continuing the conversation about that bill.”
The concept requires “in-depth analysis” beyond what can be laid out in a legislative bill, she said.
Rep. Anna Eskamani, co-sponsor of the bill with South Florida-based representatives Christine Hunschofsky and Marie Paule Woodson, said she understood that the bill was withdrawn while Cassel requests funding for a feasibility study, possibly in conjunction with Florida State University.
“This is a good bill and an important step in addressing Florida’s property insurance crisis, and there is bipartisan agreement to that point too,” said Eskamani, who represents a section of eastern Orange County. “My understanding is that steps are being taken to further study the policy concepts within the bill, and I will do my part to ensure that the state moves in the direction of providing universal storm coverage for our constituents.”
As Cassel said, mandating availability of state-backed windstorm insurance for all is a complex and revolutionary concept. Enactment would radically upend the state’s policy of reserving Citizens insurance as a last-resort option to homeowners and businesses in high-risk areas who cannot otherwise find or afford coverage.
Citing laws that require assessments of nearly all insurance customers in Florida for any shortfall in Citizens’ ability to pay all claims after major catastrophes, lawmakers and Citizens officials focus on reducing — rather than increasing — the company’s policy count through an extensive depopulation program that encourages “takeouts” of Citizens customers by private insurers.
Cassel’s bill would have flipped that script by requiring Citizens to make windstorm coverage available for any home, including condo buildings and mobile homes. Private market insurers would be able to sell the coverage alongside their “multiperil” products that would cover all other types of claims, including from fires, lightning strikes, and intrusion from rain.
Cassel co-sponsored a similar bill last year, with Lee County Rep. Spencer Roach, who has since retired from the Legislature. During a hearing before the House Insurance and Banking Subcommittee, Citizens CEO Tim Cerio pushed back on the proposal, saying it could cause Citizens’ reinsurance costs to increase by 645% to $5.6 billion.
But Cassel and Roach argued that the idea would save policyholders money that private market insurers pocket during years with no storms. Those savings would go into a pool, they said, that would be available to pay claims during years when hurricanes strike.
In 2006, a former Florida state representative proposed a similar plan, projecting that the pool would amass an $82 billion surplus if the state managed to avoid catastrophic storms for 10 years. While the state indeed avoided a hurricane for the following 10 years, hurricanes have hit Florida at an accelerate pace since Hurricane Irma in 2017.
Addressing the new bill during a subcommittee hearing on Feb. 4, Cerio said the idea would be a “radical departure” from Citizens’ mission, but added, “Obviously, whatever the Legislature decides to do, we are going to implement it.”
Cerio also pledged to make Citizens officials available and provide accurate data for any study of the idea that the Legislature might request.
Shortly after filing the bill in December, Cassel announced that she had changed political parties from Democratic to Republican, a move that led to her being named as vice chair of the House Insurance and Banking Subcommittee. The appointment by House Speaker Danny Perez made Cassel, an attorney who represents policyholders in disputes with insurers, better positioned to compel action on insurance issues.
If funded, the feasibility study could be conducted by FSU’s Catastrophic Storm Risk Management Center, which is housed within the College of Business’ Department of Risk Management/Insurance, Real Estate and Legal Studies.
In 2020, the center completed an exposure analysis study for Citizens that looked at opportunities to further reduce the company’s exposure as well as to increase the availability of private market residential property insurance.
Department officials did not immediately respond to emails asking about the potential for a study.
Asked about the possibility of a feasibility study by FSU, Cassel said nothing has been determined yet.
““I am working with the administration to figure out the next course of action for that legislation,” she said. “As you can imagine, an idea like that requires a much more in-depth analysis than what a bill can provide at this time. We really need to look into the details of what it would look like before we pass huge legislation like that, and I’m excited to look to that potential prospect.”
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at rhurtibise@sunsentinel.com.
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