Florida governor plans to call second special session to deal with insurance crisis

Florida’s beleaguered property insurance industry is hoping for a second time around, after Gov. Ron DeSantis announced he was working with lawmakers to plan another special session to help stabilize the market.

The governor’s office did not provide details or a copy of an executive order calling the session, but at an event in hurricane-ravaged southwest Florida, the governor said lawmakers could meet after the November 8 elections and before the end of the year, according to reports. House and Senate leaders and insurance industry activists have signaled they are ready to tackle the problems facing an insurance industry that has seen six insurers become insolvent this year while others have dramatically increased their premiums.

“We support him. We hope to see more legal reforms, especially on one-way attorney fees,” said Michael Carlson, lobbyist and president of the Personal Insurance Federation of Florida, which represents a number of carriers.

A special session held in May approved two measures aimed at reducing claims litigation, prohibiting plaintiffs’ attorney fees in assignment of benefits claims, providing insurers with a layer of state-provided reinsurance and allowing police to pay only for roof repairs, not a full replacement, in many cases.

But insurance executives and advocates said much more was needed to stabilize a market that appears to be overwhelmed by litigation and soaring reinsurance costs. DeSantis said Thursday he wanted further action on Mayt that the legislature was unwilling to accept, according to Politico, a news site.

Several ideas were discussed in the industry for the next special session, including:

• AOB. Revise state law to allow insurance policies that prohibit the assignment of employee benefit agreements. Florida Chief Financial Officer Jimmy Patronis on Wednesday — the day before DeSantis announced special session plans — proposed an outright ban on AOBs. But it was unclear Friday whether DeSantis and legislative leaders were okay with that for a special session. It’s also unclear whether such a ban would withstand court scrutiny, Carlson said, because Florida law has long allowed people to assign contracts.
• Cat fund. Lower the retention level, or deductible, that insured losses in Florida must achieve before insurers can access the Florida Hurricane Catastrophe Fund. The state-created fund provides cheaper reinsurance after major hurricanes, but accessing it earlier could save some carriers millions of dollars on their reinsurance bills, proponents of the idea said. Providing another layer of state-backed reinsurance, at reduced premiums, was also rejected.
• Lawyer’s fees. At the heart of Florida’s insurance crisis, according to many insurers, are Florida laws that allow plaintiffs’ attorneys to earn significant fees when they prevail in litigation, even if the fees are far superior to judgment or settlement. The May Special Session banned plaintiff attorney fees, but only in AOB cases.

Industry insiders and business leaders said waiting for the 2023 regular session of the Legislative Assembly to make reforms would be too late and would not relieve insurers ahead of reinsurance renewal deadlines. next summer. Reinsurance prices have skyrocketed this year and are expected to rise further.

Whatever measures lawmakers consider to save the property insurance industry must be accompanied by some type of short-term relief for homeowners, many of whom have seen premiums double or triple in the past. past two years, some insurance advocates said.

Carlson and others said Hurricane Ian, which swept through the state Sept. 28-29, may have provided the last straw needed to spur state leaders to consider another session and to take broader measures. Patronis, insurance agents and policyholders reported that the hard-hit Fort Myers area was inundated with public experts, announcements from plaintiff attorneys and contractors hoping to benefit from homeowners’ insurance claims.

As of Thursday, Oct. 20, the Florida Office of Insurance Regulation reported that 564,399 insurance claims had been filed in the aftermath of Hurricane Ian, with estimated insured losses so far reaching more than $6.6 billion.

The call for a special session also came a week after Democratic gubernatorial candidate Charlie Crist criticized DeSantis for failing to fully respond to the crisis and allowing bonuses to soar.

“No one believes Ron will finally do the right thing and fix his broken insurance market in his last month in office,” Crist said in a press release, according to Policy.

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