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FAIA opposes House amendment that would reduce commissions for Citizens agents

A legislative proposal introduced late Monday would dramatically alter the way agents place business with Citizens Property Insurance Co.—and significantly reduce agent commissions. This development is a very serious threat to agents, given the proposed language is likely to be added to a bill with only a few stops left before final passage.

The proposal is being introduced as an amendment to the omnibus insurance bill that is scheduled to be heard before the House Economic Affairs committee tomorrow, Wednesday, February 22, at 9:00 a.m.

While some of the proposals in the amendment have merit, the Legislature is not the proper venue for consideration of these changes. This is particularly true when it comes to agent commissions, which are clearly under the authority of the Citizens Board of Governors. Most perplexing is why the Legislature is considering such an amendment when many of the same proposals are already under consideration! Why usurp the work of the Citizens Board—which is working with FAIA and other affected parties—by throwing together a series of major operational changes that would become cemented in the Florida Statutes? FAIA strongly opposes this approach and is very busy expressing this position to lawmakers in Tallahassee.
In fact, we're working on all fronts. Tomorrow, FAIA President Jeff Grady and Industry Relations Manager Dave Newell travel to Orlando to present agent commission information to the Citizens Market Accountability Advisory Committee as part of the Citizens Board's ultimate review of strategies to depopulate Citizens and reduce its exposure. (It's worth noting that this review process was set in motion in large part because the Legislature failed to address rate inadequacy, Citizens' most fundamental problem, in the 2011 session.) This is an open meeting and interested agents may listen via teleconference.

FAIA is fully committed to working with all parties to reduce Citizens' exposure and improve the insurer's financial condition, but significant policy changes that are not thoroughly vetted and considered by all the affected parties won't come close to solving the problem and, worse still, will have unintended consequences.

Know that your association is actively working behind the scenes to block this amendment, but that we also may need your grassroots assistance in the near future. Stay tuned for additional information that will likely include talking points for use when contacting your legislator.

Reposted from Florida Association of Insurance Agents.