News & Updates


Crist Vetoes “Consumer Choice” (Rate Deregulation) Bill

By:  Travis Miller

In a letter of June 24, 2009, Governor Crist announced his much anticipated decision on the fate of HB 1171, known alternately as the Consumer Choice Bill, the Rate Deregulation Bill or the State Farm Bill. The bill, which passed the Florida House and Senate by wide margins would have allowed insurers meeting certain criteria to charge rates in excess of their filed and approved rates. The bill generally would have benefited only large insurers because the various participation requirements contained surplus thresholds of $150 million or more.

The bill received support from many pro-business associations, as well as consumers interested in having the option to stay with their current insurers if they are willing to pay higher premiums. Consumer groups opposed the bill, and several industry representatives expressed concern that not extending the bill’s benefits to insurers with less than $150 million in surplus would create an unfair competitive environment.

In vetoing the bill, the Governor noted that the “choice” offered by the bill is a choice given to select insurers and not necessarily individual consumers. In addition, the Governor mentions that the bill might have an adverse effect on the Florida-based market, its consumers and its investors. Finally, the Governor cited concerns that the bill would not ensure that companies taking advantage of the new rate flexibility would commit to their policyholders or the Florida market in the long run.

Senator Mike Bennett and Representative Bill Proctor, proponents of the legislation during the recent session, promptly responded in a joint statement that although the Governor has a constitutional right to veto the bill, the legislature has constitutional rights as well, hinting at a possible attempt to override the veto. The legislature is not scheduled to meet again until early 2010, absent a special session in the meantime.