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Bill Filed in Florida Creates "Loyalty Clause" for Insurers

As the Florida Legislature convenes today, one bill already filed would create a "loyalty clause" prohibiting insurers from canceling a policy for homeowners who have...
March 7, 2006

As the Florida Legislature convenes today, one bill already filed would create a "loyalty clause" prohibiting insurers from canceling a policy for homeowners who have been with a carrier for three or more years. The provision is part of a bill by Sen. Ron Klein (D) that also proposes abolishing the "file and use" rate system that allows insurers to start charging higher rates the day they apply for permission from the state to get a rate increase.  Another bill, by Sen. Mike Fasano (R ) proposes to discourage "cherry picking" by requiring insurers who offer a certain type of insurance elsewhere to offer it in Florida.

PIA of Florida Executive Vice President Mark O'Connell says, "2006 is an election year, and the devastation caused by the hurricanes of the previous two years has brought property insurance to the forefront."  PIA of Florida legislative affairs director Ron Villella agreed, saying the impending election means politics will be played with insurance issues. "That means it's more challenging to sort out the bills that have strong support and those that are introduced for political reasons. This being an election year means we need to pay close attention to the details and I will keep vigilant over any insurance-related bills that surface."

PIA of FL: Lawmakers Mull Rate, "Loyalty Clause" Bills (Insurance Journal 2/13/06)

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