Crist likely to veto insurance bill
By CATHERINE DOLINSKI
Published: June 4, 2009
TALLAHASSEE – Gov. Charlie Crist said Wednesday he likely will reject legislation allowing large national companies to charge whatever rates they wish for property insurance in Florida.
Lawmakers approved the bill this spring after State Farm Florida declared it would pull out of the state’s property insurance market. The insurer announced it was leaving after regulators rejected the company’s request to increase rates 47 percent.
"Insurance companies are important to have, particularly in the setting that we’re in right now," Crist said. "But I think it’s also important to have appropriate regulation."
Asked whether that means he will veto the bill, he said, "It’s moving in that direction."
The governor spoke after touring the state Emergency Operations Center, which was simulating emergency responses based on the Category 4 hurricane that hit Miami in 1926.
Such a storm likely would cost $160 billion today, said Ruben Almaguer, interim director for the Florida Division of Emergency Management. "This … would probably bankrupt our state."
Bill Proctor, the House sponsor of the bill, cited the same storm as evidence of Florida’s overexposure to hurricane losses. That vulnerability, he said, is worsened by regulations that hasten the exodus of strong national insurers from Florida. "We’re one large hurricane away from a major threat to the economy of this state," said Proctor, R-St. Augustine.
Proctor rejected the notion that State Farm inspired his bill.
"The impetus for the bill went back to 2007 when a retired National Guard officer called me wanting to know why, if he was willing to pay the rate, that he could not retain his USAA insurance policy," Proctor said. "Average citizens are not worried about the cost of their policy so much as how quickly their claim will be paid and what assurances they have that they will be paid."
Under the bill, he said, "Consumers have a choice: If they don’t like the rate, they don’t have to pay it."
Yet consumer groups including the Florida Public Interest Research Group and the Consumer Federation of the Southeast are railing against the plan, saying it will remove vital consumer protections.
Mike Bennett, the bill’s Senate sponsor, said he doubts those advocates have read the bill.
The Bradenton Republican said he has about 2,000 letters from State Farm policyholders who received rate quotes from Citizens Property Insurance Corp., the state-run insurer of last resort, that would double or even triple what they are paying.
"If the governor really, truly wants to keep costs low for his constituents, he should let them make their own choice, not him," he said.
Chris Neal, spokesman for State Farm, said the company cannot say yet whether it will stay in Florida if Crist enacts Proctor and Bennett’s legislation.
There are other options, according to Insurance Commissioner Kevin McCarty, who is trying to prevent State Farm from shedding most of its property insurance policyholders onto Citizens. In a letter to Crist, McCarty noted that Florida has gained 40 insurance writers since 2006, with more than $4 billion in capital.
"Are we really going to rely on Citizens and 40 small companies?" he asked. "Is that really our insurance policy for the state of Florida?"
Reporter Catherine Dolinski can be reached at (850) 222-8382.