Legislative issue: Getting cozy with property insurance industry
February 28, 2010
With each year that a hurricane doesn’t make landfall in Florida, the political muscle of the insurance industry surges back. Anti-industry sentiment peaked with Gov. Charlie Crist’s 2006 election and the skyrocketing premiums that hit consumers after the devastating 2004 and 2005 seasons.
Three years removed from sweeping changes in insurance regulation during Crist’s first month in office, the pendulum in the Legislature is far along on its sweep back toward industry-friendly proposals. The change began in earnest last year.
Back again are Sen. Mike Bennett and Rep. Bill Proctor with a proposal to allow property insurance companies to set premiums at levels they wish. Popularly known as the “State Farm bill” — after regulators rejected a proposed 49 percent rate increase, the largest private property insurer is now in the process of canceling 125,000 policies in the next 18 months — its sponsors said it would allow the market to set rates. Crist vetoed a less ambitious version passed by the Legislature in 2009.
Last year, lawmakers ended a three-year rate freeze on state-run Citizens Property Insurance rates with a controlled “glide path” to financial soundness that meant a statewide average rate increase of 4.5 percent. Now, bills are expected to propose similar incremental premium increases for private companies. Industry advocates said provisions for annual rate increases of up to 10 percent are one possibility, with regulatory approval required only later. It would return a limited version of the file-and-use rate setting lawmakers did away with in 2007.
Though the Legislature is more willing to consider changes sought by the industry, Crist has indicated that he remains as opposed in the last year of his term as he was in the first.
— Paul Flemming,