Crist vetoes property insurance measure and other bills

Gov. Charlie Crist on Tuesday night vetoed seven bills, including a comprehensive property insurance bill that would have  made it easier for insurers to raise rates up to 10 percent to cover items such as the cost of reinsurance or to make up for inflation.

Crist had warned during the session that he would not sign off any measures that could lead to rate hikes for consumers. But those in the insurance industry as well as Insurance Commissioner Kevin McCarty said the legislation – SB 2044 - was needed in order to bring down “cost drivers’’ that were forcing insurers to seek rate hikes.

The measure also put a three-year limit on when someone can file a claim from a hurricane and it changed how much insurers have to pay out initially for structural damage.

Crist in his veto message said that “during these very difficult economic times, Florida consumers should not to be concerned with an additional premium increase to their policy.” Crist also said that the bill made “troubling changes” to the way mitigation discounts are applied to homeowner policies.

But Senate President Atwater called the veto a “sad day for Florida’s homeowners.”  He said “Crist chose to weaken Florida’s insurance market and make Floridians vulnerable to higher premiums.  This veto allows insurance companies to increase rates on Florida homeowners without accountability.’’ Atwater is referring to a clause in the bill that extends a ban on “use and file” until the end of 2011. Because of the veto insurers next year will be able to raise rates while the rate request is under review by state regulators.

The other bills he vetoed were: HB 545, HB 569, SB 1004, HB 1385, SB 1964 and HB 7203. HB 545 was a top priority for the Florida Association of Realtors. It repealed the requirement that sellers of homes along Florida's coastlines disclose to potential buyers the home’s windstorm mitigation rating.

Realtors said the rating was not needed because it was costly to obtain and would delay home sales. Crist, however, called the rating “helpful” and said there was no “compelling reason to repeal this consumer-friendly law.”

Crist on Tuesday night did sign several other measures into law, including a comprehensive insurance bill, SB 2176. It includes changes to the state's workers compensation laws and includes a provision to crack down on agents who bilk Florida seniors. The so-called "SafeGuard our Seniors Act" was a priority for Atwater, R-North Palm Beach, and Chief Financial Officer Alex Sink.

SB 2176 also exempts from rate review several commercial lines of insurance. The changes in the worker's compensation laws, meanwhile, are limited to law enforcement, correctional or correctional probation officers who suffer from tuberculosis, heart disease, or hypertension. Effective July 1, 2010 there would be a presumption that the condition did not occur on the job if the employees didn't follow their doctor's instructions under the bill.

Crist also signed into law HB 1307, which makes changes to oversight of the state’s pension fund, and HB 965. HB 965 requires property appraisers to adjust the value of the property when affected by the tainted drywall, assuming the problem could be remediated. There have been complaints from 30 counties around the state about homes that were filled with foul odors and had household metals corroded by the fumes.

“The homeowners that have been affected by Chinese drywall deserve our unwavering assistance and support,’’ Crist said in a statement. “Through no fault of their own, their property values have been impacted and this legislation is one bold step we can take to protect their investment.”

Governor vetoes environmental bills

Gov. Charlie Crist on Tuesday vetoed bills related to yard waste in landfills and petroleum contamination sites. Both HB 569 and HB 1385 were introduced by Rep. Ralph Poppell, R-Vero Beach and chairman of the House Natural Resources Appropriations Committee.

HB 569 would have lifted the state ban on yard waste in landfills where methane gas was captured and burned to produce electricity. Waste Management Inc. and the North American Solid Wastes Association supported the bill, with Waste Management saying it would allow trash haulers to use a single truck to pick up both yard waste and household garbage. But it faced opposition from Sierra Club Florida, the U. S. Composting Council, Hillsborough County and the Southern Alliance for Clean Energy.

In his veto letter, Crist said the bill represents a step backwards in Florida's recycling efforts and it could cause landfills to fill up quicker.

HB 1385 would have extended the deadline for the cleanup of petroleum contamination sites and allowed the owners of 4,985 contamination sites to ask the state to remove them from the list if they do not pose a threat to drinking water supplies. The bills supporters included the Florida Ground Water Association and the Florida Petroleum Marketers and Convenience Store Association. Representatives of the Florida League of Cities and the Florida Association of Counties raised concerns during the session that the bill may deny local governments control over the use of lands with contamination.

Crist echoed the concerns of cities and counties in his veto letter and said the bill directs the Florida Department of Environmental Protection to set less protective standards for site cleanups. He also raised concerns that the bill would redirect $10 million from cleaning up more dangerous sites and would divert the money to the least dangerous sites.

Health care reform deadline missed

One of the first deadlines in the federal health reform came and went on Tuesday largely unnoticed.

The National Association of Insurance Commissioners sent a letter to the federal government on Tuesday saying it wouldn't be able to meet a June 1 deadline to establish what should and should not be included when determining appropriate medical loss ratios. The new federal law requires the NAIC to establish uniform definitions and standardized methodologies for calculating the medical loss ratio and rebates outlined in the federal health care reform overhauls.

The legislation actually gives the NAIC until December to develop the recommendations but the U.S. Department of Health and Human Services asked the NAIC to move the deadline up to June in order to have the rules in place before January when the MLR requirements go into effect.

NAIC President Jane L. Cline, NAIC President and West Virginia Insurance Commissioner said in her letter that the group will strive to make the recommendations by the end of the summer. The National Association of Insurance Commissioners is a group established in 1871 and comprised of insurance regulators from 50 states, the District of Columbia and the five U.S. territories. It was established to assist insurance regulators when uniform regulation is appropriate.

"To ensure all views are heard and considered, and everyone has time to review proposals under consideration, the NAIC is using a very transparent, but time-consuming, process.," the letter notes, adding that since the passage of the federal law the NAIC and its subgroups have held twelve open conference calls; received over 50 comment letters from various stakeholders; and, posted all drafts, call summaries and comment letters on its website. 

"The medical loss ratio and rebate program ... have the potential to destabilize the marketplace and significantly limit consumer choices if the definitions and calculations are too restrictive. Equally, the medical loss ratio and rebate program could be rendered useless if the definitions and calculations are too broad. Only through an open, deliberative process can we hope to reach a reasonable consensus that meets the dual objectives of protecting consumers and preserving competitive markets."

The federal health overhaul requires that health insurance companies and HMOs spend at least 80 percent of the premium collected for individual and small group plans on health care.  For large group plans companies are required to spend 85 percent of the premium on health care. 

What exactly constitutes health care versus administrative expenses is what the NAIC is charged in helping to develop. 

Some of those most concerned about the impending MLRs are the insurance agents. The National Underwriter reported in May that insurance agents had posted comments on the NAIC website regarding the MLRs.

Originally published in The Florida Current, our subscription-based news service.  Learn more and subscribe here

Items for the Florida Current were written by Florida Tribune staff writers Gary Fineout, Bruce Ritchie and Christine Jordan Sexton.