News & Updates


Kevin McCarty: Insurance veto was to ease consumer pain

Kevin M. McCarty • My View • July 7, 2009 

Since Gov. Charlie Crist’s veto of House Bill 1171, there has been considerable media coverage and commentary on the bill, its veto, and the Florida property insurance market in general. Unfortunately, a substantial amount of the commentary has included incomplete or incorrect information.

In response to the unprecedented rate increases associated with the 2004 and 2005 storm seasons, Crist worked with the Legislature to expand Florida’s unique Hurricane Catastrophe Fund, halt the pending 70-80 percent rate increases, and lower insurance rates an average of 15.9 percent statewide. The rates homeowners have paid have remained stable since that time, largely due to the regulatory reforms passed in 2007.

House Bill 1171 would have reversed and undermined these reforms by allowing large national insurers to arbitrarily raise their rates without regulatory oversight. Considering the financial stress our residents are experiencing in the face of a national recession, I believe that it is irresponsible to allow multi-billion dollar corporations to subjectively raise their rates without actuarial justification. Accordingly, I warned the governor of the potential for substantial and unpredictable rate increases that would result from House Bill 1171.

Additionally, it is difficult to characterize House Bill 1171 as "consumer choice" to someone who simply cannot afford the rate increases and has no choice but to find a new carrier. For there to be true "consumer choice," the buyer must be positioned to negotiate terms and coverage, as well as price. House Bill 1171 would have removed these assurances by relaxing regulation and allowing insurers to charge unregulated rates.

Florida has made great progress to stabilize insurance premium rates and increase competition. In fact, 40 new companies have come into the Florida insurance market since 2007. While these reforms have strengthened Florida property insurance market, we still have more work to do. I look forward to working with Governor Crist and the Florida Legislature to continue our efforts to create a healthy, vibrant and affordable insurance market in Florida.

•Kevin M. McCarty Florida Insurance Commissioner and can be reached though the Florida Office of Insurance Regulation, 200 East Gaines Street, Tallahassee, 32399 or online at