Expansion of state rate deregulation to all commercial auto and property has been endorsed this week by both insurance committees in the Florida Legislature, with the plan showing strong support and momentum.

The House bill (HB 99) was approved unanimously Wednesday by the Banking & Insurance Subcommittee. Senate Banking & Insurance approved the Senate version (CS/SB 178) on February 7.

Rep. Brad Drake, R-DeFuniak Springs, amended his bill to clarify that insurers and rating organizations would absorb costs for providing data requested by the Office of Insurance Regulation to support rate increases implemented under the package.

If OIR needs documentation, it will be empowered to say to the insurer or rating organization, “We’re not going to pay for it. You are going to pay for it,” Drake said.

The  committee substitute with the amendments incorporated will be available from this link sometime soon, perhaps later today:
http://www.myfloridahouse.gov/Sections/Bills/billsdetail.aspx?BillId=44921&

In the meantime, here are the key amendments adopted Wednesday:

Remove line 90 and insert:
rates and are subject to examination by the office. The office
may require the insurer to incur the costs associated with an
examination.


Remove line 109 and insert:
examination by the office. The office may require the rating
organization to incur the costs associated with an examination.


As noted above, the Drake bill was passed unanimously. It will next be heard by the House Economic affairs Committee.

It is supported by the American Insurance Association, Florida Insurance Council, Property Casualty Insurers and other insurance trades. Significantly, it is supported by the business lobbying associations, including Associated Industries of Florida and the Florida Chamber. Their members, the businesses who buy the affected lines of insurance, are comfortable with the rate deregulation and welcome the additional flexibility and competition to be promoted among commercial carriers, they testified.

The Senate bill (CS/SB 178) by Sen. Steve Oelrich, R-Gainesville, was approved 7-2 by banking & Insurance on Monday. It is now in Senate Commerce & Tourism.

Legislative committees are doing pre-session work, so-called interim committee meetings. The formal, 2011 session begins March 8.

The 2010 Legislature passed a bill last session ending OIR full rate regulation for commercial auto insurance on fleets of 20 or more vehicles and certain designated commercial property & casualty lines. Then-Governor Charlie Crist signed it. HB 99 and SB 178 expand that to all commercial auto and general liability insurance, nonresidential property insurance, nonresidential multiperil insurance, and excess property insurance.

The bills also specify that: the errors and omissions coverage that is already exempt under the statute is for professional liability insurance; the current statutory exemption for directors and officers, employment practices and management liability coverage is also to include fiduciary liability coverage.