The National Risk Retention Association (NRRA) has announced three stages of fundraising to combat Florida Senate Bill 516, which if passed into law, would require an AM Best “A” rating and a minimum financial size of $100mn in capital surplus in order for an RRG to write commercial auto liability in the state.
Phase one of funding plans include the current campaign to communicate with and educate legislators as to the “inherent flaws in the bill”.
NRRA said it had already written four letters in opposition to the Bill to the involved committees, the Senate President and House Speaker.
The Association has also partnered with Paul Handerhan, president of the Federal Association for Insurance Reform (FAIR), who has joined forces with Lewie Pugh, executive vice president and legislative spokesman for the Owner-Operator Independent Drivers Association (OOIDA), and Linda Allen, a small independent Florida trucker.
“While our interest and those of the proponents are actually not inconsistent, their language will be self-defeating, while ours will not be,” Joe Deems, NRRA executive director said.
“The purpose will be to persuade an amendment to the Bill that will work.”
Deems has previously said that the Bill unlawfully seeks to regulate RRGs, and unlawfully discriminates against those that do not obtain such ratings.
He believes the Bill could impact 96% of the RRGs registered in Florida.
“If Florida can get away with violating the federal law by making any financial rating a requirement to do business in their state, it may set a precedent to make other states bolder to do the same thing,” Deems added.
“We need to stop this bill before it passes because, if it passes, suing the state will take years and will be too late to help these impacted RRGs.”
Phase two will be dependent on the amendments actually adopted and includes an ongoing campaign to develop favourable agreements with multiple state agencies who require liability insurance from RRGs, such as the Department of Highway Safety and Motor Vehicles.
Deems said the estimated cost of this will be in the range of $75,000 to $90,000.
On 10 April, the House Commerce and Senate Appropriations Committee voted unanimously to approve the Bill.
While the Bill did pass the Senate Appropriations Committee hearing on 12April, the vote was not unanimous, and it prompted greater discussion and a desire to know more about its potential wider impact.
If the Bill passes with the current language, NRRA said its third phase of the campaign would be to commence litigation to and challenge it at the federal level, with an estimated cost of $150,000.