BILL EXEMPTING CERTAIN COMMERCIAL LINES FROM RATE REGULATION IS INTRODUCED IN FLORIDA
ATLANTA, GA, Mar. 1, 2010 – Passage of legislation to exempt from rate regulation certain commercial lines risks is the top priority for the American Insurance Association (AIA) during the annual Florida legislative session that begins tomorrow. The bill is backed by commercial insurers and the state’s major business organizations.
SB 2176, introduced at the request of AIA by Sen. Durell Peaden (R-Crestview), excludes certain categories of commercial insurance from the rate filing and approval process. Current Florida law exempts only those policies with annual premiums above $500,000 in addition to other criteria.
“Insurers are concerned by the growing trend of Florida regulators applying strict control over commercial rates,” said Cecil Pearce, AIA vice president. “Continued over-regulation, resulting in a drawn out process for filing approvals, and delays in getting commercial products to market, will negatively impact insurers’ ability to attract sufficient capital to meet Florida’s commercial insurance needs in the coming years.”
Categories of insurance exempt from the filing and approval process include excess or umbrella, surety and fidelity, commercial auto, directors and officers, and environmental liability. Also, coverages with an annual premium exceeding $25,000 are excluded. Commercial property is not included in the legislation. Insurers would still be required to develop rates that are subject to the current standards (neither excessive, inadequate or unfairly discriminatory), to make that information available to regulators if requested and to advise regulators of rate changes.
“Under our legislation, for certain commercial insurance coverages, Florida will rely on market competition to set rates, while keeping a safety net of regulation,” said Pearce. “Balanced regulation is critical if Florida is to attract needed private claims-paying capital in the years ahead, and we believe policymakers are ready to hear that message and act on it.”