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Gov. Crist plans to sign bill allowing home insurance rate increases

From the South Florida Sun-Sentinel 

The governor is expected to veto a deregulation bill the Legislature also approved to draw large property insurers back to Florida by allowing them to charge essentially the rates they choose.

By Julie Patel | South Florida Sun Sentinel
4:55 PM EDT, May 5, 2009 

Florida Gov. Charlie Crist said Tuesday he plans to sign into law legislation that will allow Citizens Property Insurance, the state’s largest property insurer, to increase policyholder premiums by up to 10 percent a year for several years. 

"That’s probably appropriate," Crist told reporters this week. "I would rather not have rate increases. Who wouldn’t? But I want to make sure the company stays solvent and secure."

Florida lawmakers passed a property insurance package last week that includes raising state-backed Citizens rates that have been frozen since 2006.

The governor is expected to veto a deregulation bill the Legislature also approved to draw large property insurers back to Florida by allowing them to charge essentially the rates they choose. 

"That one gives me some pause," Crist said.

The broader property insurance bill aims to reduce financial risks for Floridians if a major hurricane hits. All automobile and home insurance policyholders pay fees to offset deficits in state insurance entities such as Citizens and the Florida Hurricane Catastrophe Fund.

The bill would, among other things, increase rates for and phase out a $12 billion part of the $29 billion catastrophe fund; allow a quicker process for private insurers to pass certain backup coverage costs to customers, adding up to no more than a 10 percent average annual increase in an annual premium; impose restrictions on public adjusters, hired by policyholders with claims disputes; and extend by one year a provision requiring state approval before insurers implement rate increases.

The legislation diverges from property insurance laws the past two years that aimed to hold insurers accountable and reduce policyholder premiums because they doubled or tripled in some cases after the 2004 and 2005 hurricane seasons.

Julie Patel can be reached at 954-356-4667 or jpatel@sunsentinel.co