The Florida Legislature has approved reforms to the state-run Citizens Property Insurance Corp., including provisions that will end insurance subsidies for new construction in environmentally sensitive coastal regions.
The state Senate in May concurred by a 32-1 margin to an amended version of S.B. 1770, as passed earlier in the week by the state House of Representatives. With the Senate’s concurrence, the measure moved to Gov. Rick Scott’s (R) desk. He signed the bill into law on May 29.
Among the bill’s provisions is one based on a proposal from R Street Florida Director Christian R. Cámara that will bar Citizens from insuring new construction in areas seaward of the Coastal Construction Control Line. The rule would end subsidies to development that damages Florida’s coastal environment, threatens wildlife habitat and destroys natural storm barriers, Cámara said.
“We want to thank Sen. David Simmons and Rep. John Wood for sponsoring and shepherding this legislation. They were very open and accommodating to new ideas throughout the process,” Cámara said.
Among its other provisions, S.B. 1770 will create a clearinghouse to verify the eligibility of policies coming in to Citizens. The company currently has 1.3 million policies. The bill also would bar Citizens, starting in 2014, from insuring structures valued at more than $1 million. That cap would be lowered gradually until it reaches $700,000 in 2017.
The bill does not raise rates for either new or existing Citizens customers. Citizens’ rate structure, which does not reflect the true risk of catastrophic storms, is unsustainable and exposes all Floridians to potentially crippling post-storm taxes, said Cámara. Nonetheless, he noted the legislation does represent a real, if modest, step in the right direction.
“This is a win for Florida taxpayers, consumers, businesses and charities, by moving toward restoring Citizens as a true insurer-of-last-resort, promoting competition in the state’s insurance market and protecting Florida’s environmentally-sensitive coastal areas from irresponsible overdevelopment,” Cámara said.
Source: R Street Institute