A bill to shrink Citizens Property Insurance and allow all insurance companies to raises rates higher and faster cleared another committee in the Senate on Tuesday.
SB 1770, backed by Sen. David Simmons, R-Altamonte Springs, is full of enticements long-desired by the insurance industry, along with proposals to make Citizens leaner.
The proposal is a massive insurance reform effort that targets state-run Citizens, but also includes potentially costly side effects for homeowners with private insurers.
It provides new options for insurance companies looking to charge higher rates, forces Citizens to increase rates and allows private insurers to access Citizens’ $6 billion cash reserves under favorable terms.
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Some lawmakers from coastal areas expressed concerns about how the bill would impact the pocketbooks of their constituents, some of whom would see their rates jump if SB 1770 goes into law.
Sen. John Legg, R-Port Richey, said his constituents might see their rates triple under one of the provisions in the bill, which forces Citizens to charge “actuarially sound” rates.
Sen. Wilton Simpson, R-Trilby, also expressed concerns, saying that lawmakers needed to be careful about the financial side effects of raising insurance rates to high.
Simmons said he will work to address lawmakers’ concerns, but that something had to be done to address the high level of risk that faces the state if a major hurricane occurs.
“I will promise to work with those of you who have doubts,” said Simmons. “I can tell you that something’s got to be done.”
The bill cleared the Government Operations subcommittee on Tuesday and heads next to the full Appropriations Committee before a full floor vote.