Insurance commissioner asks Crist to sign measure
By MICHAEL PELTIER The News Service of Florida
Published: Wednesday, May 12, 2010 at 1:00 a.m.
Last Modified: Tuesday, May 11, 2010 at 10:34 p.m.
TALLAHASSEE – Placed in a relatively unusual position, Florida’s top insurance regulator urged his boss, a possibly reluctant governor, to sign recently enacted property insurance legislation that has the department’s blessing.
Speaking before the Cabinet on Tuesday, Florida Insurance Commissioner Kevin McCarty urged Gov. Charlie Crist to sign SB 2044, which among other things allows companies to raise rates to make up for inflation and reinsurance increases without having to go through lengthy filing procedures.
McCarty told the panel that the bill provides a number of provisions requested by the industry and the agency to temper some of the cost drivers blamed for raising rates.
“Some have characterized this as deregulation bill,” McCarty said. “Nothing could be further from the truth. There are provisions in the law that allow for an accelerated review process but all rates would be approved by the agency.”
McCarty said SB 2044 also contains a number of provisions including allowing insurers to withhold portions of claims until repairs are completed and placing more requirements on public adjusters, who have been blamed for unfairly reopening claims that have already been paid.
The measure also re-establishes a law that makes insurance companies file first and raise rates later. If Crist were to veto it, the so-called “use and file” law that would allow companies to raise rates first and then seek approval, would return.
“Without the bill, the use and file provisions would have come back into existence, which would make it very difficult to rein in future rate increases,” McCarty said.
Crist has said he has some concerns about the proposal, and has for several years been generally opposed to any legislation that would allow for higher insurance rates, although he did sign off last year on allowing Citizens Property Insurance to begin slowly increasing premiums.
The insurance commissioner has come under fire from critics in the Legislature who say he has failed to bolster competition in the property insurance market. Instead, they say McCarty has allowed financially shaky companies to continue to operate, a charge that the commissioner has vehemently denied.
Two companies, American Keystone and Coral Insurance Co. failed last year and were ordered to liquidate. Others have been required to recapitalize or take other action under Office of Insurance Regulation supervision.
McCarty said Tuesday the agency has worked with financially distressed companies that can nonetheless pay claims if they are allowed to make changes to their business plans.
“When a company is found to be impaired, it does not mean the company will fail tomorrow or will not have money to pay claims,” McCarty said.