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Subcommittee advances bill to require Citizens to disclose mandatory arbitration and allow opt-out
Summary
HB 863 would require Citizens Property Insurance to notify prospective policyholders if a policy contains mandatory binding arbitration and give them the option to accept or decline arbitration before issuance; the measure also removes Citizens' authority to contract directly with the Division of Administrative Hearings. The subcommittee reported the bill favorably.
Vice Chair Cassell presented House Bill 863 on behalf of Representative Benaroche and said the measure is intended to increase transparency and protect consumer choice for disputes with Citizens Property Insurance Corporation.
"HB 63 closes that gap by requiring Citizens to provide clear notice if mandatory arbitration provision applies and to give potential policyholders the opportunity to accept or reject arbitration before the policy is issued," Cassell said, adding the bill would repeal Citizens' authority to contract directly with the Division of Administrative Hearings (DOAH) to avoid any appearance of impropriety.
Committee members questioned how the bill would affect policyholders who previously went through mandatory arbitration. Cassell said that in many cases arbitration settlements contain terms that preclude relitigation; she said the bill would not automatically reopen settled cases but would provide transparency and a true election for consumers in the future.
A representative of Citizens Property Insurance told the committee the insurer's "dual program" was working, saying legal savings have contributed to lower proposed rates and that recently reported statewide average rate decreases (8.7%) rely in part on those savings. The witness offered to meet with legislators to review specific claim outcomes and data.
Several members expressed concern about reporting that many arbitration cases resulted in small settlements for policyholders (a commonly cited number in discussion was about $500). Representative Wilson specifically cited a ProPublica report and asked staff to investigate the underlying numbers as the bill proceeds. The ranking member and other members supported the bill's consumer-choice approach but asked staff to clarify discrepancies in the data cited during debate.
The clerk called the roll after closing remarks and the subcommittee reported HB 863 favorably. The chair closed the meeting on a unanimous voice/roll call with one excused member.
Next steps: the measure advances from the subcommittee; lawmakers requested additional data and follow-up meetings with Citizens representatives to review historical arbitration outcomes and settlements.
