Letter from Tallahassee: Post-primaries, fixing on Cat Fund reform

by Christian R. Camara on February 1, 2012

Greetings from the SuperPAC-pillaged state of Florida!

All eyes were on the Sunshine State this week to see who Republicans would choose to be their nominee to run against President Barack Obama.  It was quite a roller coaster, especially given that Newt Gingrich roared into Florida propelled by a 12-point victory in South Carolina.  Although Mitt Romney consistently led all Florida polls until then, they quickly flipped in Gingrich’s favor following his South Carolina win.  Some polls even had Gingrich with a double-digit lead against Romney.  However, after two mediocre debate performances, much of Gingrich’s momentum began to fade. First, polls showed Romney and Gingrich in a statistical dead heat, and as the week progressed, Romney increased his lead over Gingrich.  After Republican darling Sen. Marco Rubio publicly chastised the Gingrich campaign for unfairly calling Romney “anti-immigrant” and comparing him to Republican backstabber Charlie Crist, things really began to turn against Gingrich.

Eventually, Romney would pull a landslide 46% of the vote to Gingrich’s 32%, followed by Santorum at 14% and Paul at 7%.  Romney’s victory in Florida was larger than Gingrich’s in South Carolina. In fact, the sum of Gingrich and Santorum votes together would not have been enough to eliminate Romney’s plurality victory.  Despite earning several thousand votes each, the losers in the primary will have little comfort, since Florida is a winner-take-all state when it comes to its delegates.

Although all eyes have been on the Republican Primary, Florida’s regular legislative session is in full swing.  One of the most controversial bills to be debated this session is one that seeks to privatize many of the state’s prisons.  Needless to say, public sector unions and their trial lawyer allies are vehemently opposed to this proposal, and yesterday the bill had to be temporarily postponed because an amendment to essentially gut it seemingly had the votes to pass.  This debate is not over and it will be interesting to see how it unfolds.

Another bill that should not be very controversial has been made so by some legislative leaders.  Legislation to “rightsize” the state-run reinsurance company known as the Florida Hurricane Catastrophe Fund, or Cat Fund, was added to the House Insurance and Banking Subcommittee.

Rep. Dorothy Hukill, R-Port Orange, chair of the Economic Affairs Committee, which oversees the aforementioned subcommittee, yanked the bill from the agenda within an hour of receiving it.  Critics say the bill would increase rates because companies who purchase below-market reinsurance coverage from the Cat Fund would have to replace that with coverage from the more expensive private market.  Proponents contend that the bill would protect the state’s consumers from the potentially catastrophic scenario where the Cat Fund would not have the ability to pay its claims following a storm, thus leaving thousands of Floridians without their legitimate claims being paid. They also contend that the bill would reduce rates prospectively because it would decrease the likelihood of post-hurricane assessments that the Cat Fund would have to levy on every insurance policy in the state to cover its debts.

All signs point to the bill being heard in the Senate Banking and Insurance Committee next week, which proponents hope will encourage the House to get the bill moving as well. Until next time!

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