Insurance

The bill was among a slew of changes lawmakers approved in a frantic 12 hours during what should have been their final day of the annual spring legislative session.

But Republican leaders failed to agree on the state's $66 billion budget on time and legislators will have to return next week to finish the spending bill.

With the budget vote delayed, lawmakers focused Friday on list of other issues, including the property insurance measure that enflamed tempers on the House floor.

Rep. Alan Hays, R-Umatilla, said his fellow Republicans should be "embarrassed" for not increasing rates even further.

He offered one amendment to require each private policy include a message printed in boldface, 16-point type telling private policy holders they could be forced to pay additional assessments because of unstable Citizens rates.

The amendment was defeated.

"I'm not going to be hushed," Hays said before the House voted, 80-35.

The Senate approved the bill, 32-6.

After the vote, Hays confronted several GOP House leaders. House Sergeant Ernie Sumner eventually calmed Hays.

Citizens windstorm policies are an estimated 55 percent below what insurers deem "actuarially sound," or the price customers should pay to recoup future losses.

Multi-line policies from Citizens are, on average, 40 percent lower than what a private company would likely charge.

The bill (HB 1495) would let Citizens rates increase no more than 10 percent a year until each policy was "actuarially sound." Additionally, Citizens rates could increase an estimated 1 percent under another change in the bill to the state Hurricane Catastrophe Fund.

"It's a hard bill with the economy the way it is, but we don't have a choice," said Priscilla Taylor, D-West Palm Beach.

The bill could also bring hikes of up to 10 percent for private policy holders.

Those increases would come from a decision to reduce the size of the catastrophe fund and to encourage a "rapid cash build up" of reserves.

"We're talking about cutting people's salaries and now we're talking about a possible increase of 10 percent year after year after year," said Rep. Julio Robaina, R-Miami, who opposed the bill. "We need to remember the people of Florida and the financial situation they're in."

State lawmakers increased the size of the catastrophe fund to $28 billion in 2007 as a way to suppress private insurer rates. The catastrophe fund is used to re-insure losses from private insurers.

To reduce rates at the time, the state offered companies cut rates to the larger fund and required insurers to pass the savings to customers.

By reducing the size of the fund by $2 billion per year for six years, companies will be forced back to the private re-insurance market, where rates are higher. Those higher rates will likely be passed along to policyholders.

State officials have searched for ways to pay for potential losses to the fund. The fund has only about $8 billion in cash on hand and financial experts say the credit crisis has limited the state's ability to bond.

"All the companies that are relying on the (fund), we are fraudulently telling them there is a level of coverage there," said Rep. Kevin Rader, D-Delray Beach, who supported the bill.