Reform Bill Would Establish ‘Watchdog’ to Oversee Fla. Consumer’s Rights

Florida reforms including the establishment of an insurance watchdog to oversee policyholder’s rights and argue on behalf of customers in rate cases have been suggested by Sen. Ron Klein, D-Boca Raton.

The senator, from storm-prone southeast Florida, is formulating a bill that will require insurance companies to keep policyholders who haven’t had claims in five years; eliminate the state arbitration panel that decides rate filings; and require Citizens Property Insurance to maintain lower, competitive rates.

Klein criticized state regulations requiring Citizens, the state-sponsored insurer of last resort, to have higher rates and be uncompetitive with commercial insurance providers. He maintains that since Citizens has grown to one of the largest property insurers in Florida its rates should be competitive, especially since most of its customers are in parts of Florida where private insurance is unavailable.

The senator’s proposal, to be debated during the March session of the Florida Legislature, is backed by consumer advocates and community groups. They claim that the market isn’t competitive in Florida and that policyholders don’t have choices of insurance companies.

“Insurance is the last remaining competitive business in which the government still controls prices and Sen. Klein thinks more regulation is the answer,” William Stander, regional manager of the Property Casualty Insurers Association of America said. “He argues the market can better set the price.”

Insurance industry officials claim the market is already over-regulated and many say they can’t afford to expose themselves to large amounts of hurricane risk in Florida for the premiums they’re allowed to charge.

Stander said most insurers would also oppose subsidizing Citizen’s rates, saying “It’s not fair to force taxpayers and other homeowner policyholders to pay for people who can’t get other insurance.”