Insurance regulator pushes Gov. Crist to sign measure allowing certain rate hikes
Posted by Julie Patel on May 10, 2010 01:30 PM
Florida Insurance Commissioner Kevin McCarty wrote a letter to Gov. Charlie Crist today to encourage him to sign a sweeping measure that would allow certain property insurance rate hikes and lower costs for insurers.
“This bill is an important piece of legislation that benefits the people of Florida by protecting consumers from unsupported rate increases and guarding against disruptions in the marketplace,” McCarty said. He is referring in part to a provision in the bill, SB 2044, that would extend a law, set to expire this year, requiring an insurer to have a rate hike approved by regulators before implementing it — instead of having to provide refunds later if regulators reject the request. McCarty said the bill would address “cost drivers” for insurers that consumers ultimately pay for through premiums.
He also said he wanted to correct a misperception about a provision making it easier for insurers to pass certain costs to consumers.
(Last year, lawmakers approved a bill allowing insurers to raise premiums without full oversight from regulators by up to 10 percent a year for certain backup coverage costs. The bill this year allows insurers using that provision to include other fixed costs, such as inflation, in that premium increase.)
“SB 2044 allows changes to be implemented only after a review by the Office,” McCarty said. “There is nothing in this bill that mandates any rate increases. While there is a provision that allows for insurers to recoup costs for reinsurance and inflation in an expedited fashion, any company seeking to take advantage of this provision must file these changes with the Office and is subject to a review of these rate changes.”
An OIR spokeswoman said Wednesday that the office does not support the provision.
Representatives from the office also said it does not back a provision allowing insurers to raise base rates if they can prove the discounts they provided policyholders were too high and another allowing companies to pass the costs of agent commission and advertising costs to customers without interference from regulators.
But there’s apparently enough McCarty thinks is good in the bill to outweigh parts he does not support.