The Legislature convened in special session from January 15- 22 and adopted a sweeping reform package designed to provide immediate rate relief to Floridians and make sure that consumers are treated fairly. The reforms we passed make Florida one of the nation's leaders in protecting consumers and restoring balance to an insurance market that for far too long has been in the insurance companies favor.

The legislation we passed will provide meaningful rate relief for Floridians insured by private companies, as well as for those insured by the state's Citizens Property Insurance. Additionally, the legislation repealed a 21% rate hike approved January 1 for Citizens' policyholders and stopped Citizens' rates from going up an additional 56% on March 1. Most importantly, the legislation is a responsible approach to the insurance crisis facing us, and one that lowers rates in a way that does not mortgage Florida's future.

Thank you for staying in touch with me on this important issue. Thanks to Floridians like you, homeowners will receive relief from the high cost of insurance this year. If you have any questions about the reforms we passed, please contact me and we can discuss these reforms further.

Insurance Legislation

1. Insurance Company Accountability & Regulatory Reform

The bill instills additional accountability requirements for insurance companies, including higher reserves for "pup companies," prohibition of "cherry picking," an oath of truth in rate filings, temporary suspension of "use and file" and arbitration, and expedited payment of claims.

2. Expanding Consumer Choice & Savings

The bill provides consumers with new options for insurance policies including premium installment plans, coverage options that reduce premiums, and discounts for obtaining multiple lines of coverage through the same company.

3. Expanding Consumer Information

The bill provides consumers with additional information about the amount of and reasons for their premium costs. Policy renewals will identify the amount as it relates to each assessment authority and explain the amount of premium that is due to rate and/or coverage changes.

4. CAT Fund Reforms

The bill creates a 3-year-period during which the CAT Fund retention level will be set as low as $3 billion, and the capacity will be as high as $32 billion. Insurance companies must pass savings associated with the CAT Fund changes to consumers, whether or not they purchase this new coverage. The State Board of Administration and Legislative Budget Commission will jointly share the ability to adjust the parameters of the CAT Fund.

5. Mitigation Inspections

The bill creates a statewide list of authorized inspectors and requires inspectors to pass a level 2 background check. The bill transfers $100 million in new federal funds to the mitigation program.

6. Uniform Home Grading Scale

The bill creates a uniform home grading scale for withstanding wind damage.

7. Windstorm Mitigation Study Committee

The bill creates an eight-member Windstorm Mitigation Study Committee that will hold its first meeting by February 9 and provide recommendations, including proposed legislation, by March 6, 2007.

8. Deductible Buy Down

Homeowners can reduce their hurricane deductibles through mitigation.

9. Rate Reduction

The bill requires insurance companies to inform homeowners of available means for reducing homeowner costs through mitigation and to account for hurricane mitigation measures when determining rates. The bill also calls for a uniform mitigation verification inspection form and requires insurance agents to be familiar with the available premium discounts for mitigation.

10. Uniform Building Code

The bill eliminates the Panhandle exemption to the Florida Building Code and creates code-plus guidelines for structures that exceed the minimum code. The bill limits future modifications to the building code to changes that enhance structural integrity for wind protection or the prevention of water intrusion.

11. Citizens Rate Relief & Service Improvements

Citizens will no longer be required to charge the highest rates in an area. After a rate freeze for 2007, rates will be required to be actuarially sound. The bill specifies that the Citizens Board of Directors can be terminated at will by the appointing officers and creates a Strike Force to improve consumer service and options. It removes all commercial policies in the PCJUA and places them in Citizens.

12. Market Incentives & Regulatory Reforms

The bill removes regulatory barriers to risk pooling among similar entities, to self-insurance for multi-family dwellings, and to competition among reinsurance companies.

If you would like to read the entire language of the bill please visit www.myfloridahouse.gov. You can do a bill search on the left hand side, change the year to 2007A, the bill is 1A.