Florida bill would have ‘disastrous’ impact on truck insurance
March 28, 2023
•Land Line Staff
A Florida lawmaker has proposed legislation that would decrease competition in the truck insurance market, potentially leading to exponentially higher premiums.
SB516, proposed by Sen. Nick DiCeglie, a Republican representing Florida’s 18th Senate District, inadvertently would remove risk retention groups from the insurance market.
For small motor carriers, a common truck insurance option is joining a risk retention group. These companies provide insurance coverage for nonprofits, hospitals, physicians and other medical professions, colleges and universities, nursing homes, contractors and homebuilders, in addition to small-business trucking companies.
“Florida is already one of the most expensive states for truckers to obtain truck insurance, and competition from risk retention groups keep rates from skyrocketing even higher,” OOIDA Executive Vice President Lewie Pugh said. “Removing risk retention groups from that market would have a disastrous impact on all small-business truckers in Florida, whether or not they insure through a risk retention group.”
The National Risk Retention Association, which is the only organization representing risk retention groups in the United States, is also staunch in its opposition to SB516.
“SB516 will have a serious negative effect on virtually all of the risk retention groups currently writing commercial auto coverage in Florida and their Florida policyholders,” Joe Deems, executive director of the National Risk Retention Association, said. “This legislation will most certainly have a direct and damaging impact for the Florida commercial auto insurance market as a whole.”
Deems said the legislation was introduced under “factual and legal misunderstanding” of how risk retention groups operate.
“Liability policies issued by risk retention groups registered in the state of Florida have for years been able to satisfy the state’s financial responsibility for commercial auto,” he said. “Nothing is broken, and nothing needs fixing.”
There are 25 risk retention groups licensed to sell truck insurance in Florida, insuring thousands of trucks.
The Senate Banking and Insurance Committee recently passed SB516. It is now pending before the Senate Appropriations Committee on Criminal and Civil Justice.
A companion House bill, H57, was also passed by the House Insurance and Banking Subcommittee and is now before the full House Commerce Committee. LL