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Override Crist

Basis of veto on insurance bill faulty

Last week when Gov. Charlie Crist vetoed House Bill 1171 — the property insurance legislation that would allow large insurers to increase rates without state approval — he cited all the new companies drawn to Florida since 2006 and the resulting “significant amount of new capital.” 

That point is very misleading.

True, the new property insurers have pumped $4.3 billion into the pot of money available on the state’s market, according to a report in Wednesday’s St. Petersburg Times.

But 14 of the 40 new companies are conducting business in exactly the same realm that led Crist to strike down HB 1171: They’re selling unregulated policies. More telling, though, is these companies, all surplus line carriers, account for $4 billion out of the ballyhooed $4.3 billion figure.

These carriers sell policies on high-risk properties, including waterfront mansions and expensive condominiums, but not on the standard home. Where’s the value to the average Floridian?

Rep. Bill Proctor, R-St. Augustine, who co-sponsored HB 1171 with Bradenton Sen. Michael “Mike” Bennett, told the Times: “If the surplus line is being counted, then we have a real credibility problem, in my view. If they’re not going to be helping the little guys with a small home … how are they counting it?”

We agree. This is deceptive.

The legislation, touted as the “consumer choice” insurance bill, would have let certain major insurers with long histories of customer service and satisfaction to operate in a free market and charge realistic rates. Companies such as State Farm and Allstate would thus not be compelled to flee Florida over the tight grip state regulators hold over rates.

The measure passed with an overwhelming 85 percent bipartisan support in the Legislature. A new Florida Chamber of Commerce poll found that 60 percent of the state’s voters want greater consumer options and believe Crist should have signed the bill.

In a statement refuting Crist’s reasons for his veto, Bennett and Proctor noted that they are “examining and exploring all of our options.”

We encourage Bennett and Proctor to pursue an override of the veto. Let the will of the people become law.

While the numbers Crist cited to help justify his action do not add up, neither does his claim that the measure lacked consumer protections. The bill protects consumers with provisions that require notice that rates are not regulated and offer a price comparison with state-run Citizens Property Insurance Corp. Property owners also can consult the Office of Insurance Regulation’s Web site to compare rates.

The bottom line is consumers should be allowed to purchase policies based on their own preferences and not be forced to pick between a shaky state-run operation or start-up insurers that lack consumer confidence.

The Legislature should override this veto.