Legislators Nearing Insurance Answers; Risk to Industry and Taxpayers Still an Issue

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Byline: J. TAYLOR RUSHING

TALLAHASSEE - A rare weekend at work brought the Legislature a near-breakthrough on solutions to Florida's insurance crisis Saturday, as lawmakers prepared to expand the government's role - and risk - in safeguarding properties.

A core group of 30 lawmakers donned jeans, clutched coffee cups and rolled up their sleeves for a full day of horse-trading between the House and Senate. The Legislature has been holding a weeklong special session on the insurance quandary created by the 2004 and 2005 hurricanes, with talks taken over by top negotiators in recent days.

Both chambers are scheduled to reconvene Monday to consider final approval. Gov. Charlie Crist has ultimate approval authority because his signature is required on the Legislature's finished product.

As of late Saturday, the only outstanding issue appeared to be how much risk taxpayers should shoulder for catastrophic hurricane costs. While legislators agree on that goal, they differ on how to structure a complicated fund that will give the industry stability on how much risk it is exposed to. For now, that issue has been left to House Speaker Marco Rubio and Senate President Ken Pruitt to work out.

"There's no such thing as a free roof, and you've got 160 people trying to figure out how to pay for one," said House Democratic Leader Dan Gelber, D-Miami Beach. "The issue also has everything to do with how much risk the state takes on, which is why it's been so hard to resolve."

Currently, when catastrophic costs occur, the industry is liable for the first $6 billion in losses, then the state covers losses up to a damage cap of $16 billion. Insurers use the state-backed funds as a way to offer lower rates through less risk.

Saturday produced consensus on expanding Citizens Property Insurance Corp., the state-run insurer of last resort that covers 1.3 million high-risk, mostly-coastal properties against wind damage, by allowing it to write multi-peril policies such as fire, theft and liability coverage. That would put the government-run company directly up against private insurers, which the industry firmly opposes, but lawmakers say the company should be able to subsidize its losses.

"I want Citizens to be able to hold its own. That's all," said Bill Posey, chairman of the Senate Banking and Insurance Committee. "I don't expect them to be a big money-maker. But I don't want them to bleed tax dollars, either. …