Governor Urged To Veto Deregulation Bill
The fight is heating up against legislation that would essentially allow large property insurers to raise rates without state approval.
Eight consumer groups – including the Consumer Federation of the Southeast and Florida Public Interest Research Group – have implored Gov. Charlie Crist to veto the bill passed by the Florida legislature earlier this month.
"This amounts to another bailout – this time for major insurance companies as they attempt to cherry pick the market by pricing their way out of the areas they don’t want to serve," said Consumer Federation Director Walter Dartland Wednesday in a statement.
Crist has expressed concerns about the legislation. In the past two years, Crist – who this month announced plans to run for U.S. Senate – supported laws that aimed to hold insurers accountable and lower home insurance rates after they skyrocketed following the hurricane seasons of 2004 and 2005.
"To have that industry unregulated in essence is not something that is appealing to me nor is it fair to the customer," Crist said Wednesday.
Crist also has yet to make a decision about whether to sign a broad property insurance measure that would allow Citizens Property Insurance to increase policyholder premiums by up to 10 percent a year and speed up the process for private insurers to pass certain backup coverage costs to consumers.
Consumer groups are divided on it; some say it’s needed to reduce financial risk of all Floridians if a major hurricane strikes. Others say the recession is the wrong time to increase rates.
Proponents of the deregulation bill say it would help attract large insurers that dropped policies in Florida in recent years. Rep. Bill Proctor, R-St. Augustine, said the bill would give consumers the option of paying more for a larger, more experienced insurer.
State Farm announced earlier this year that it plans to leave Florida’s property insurance market after regulators and an administrative law judge rejected its request to increase rates by up to 67 percent.
About 120 companies would be able to sell unregulated policies under the bill, according to the Office of Insurance Regulation. The Office would still be able to reject rates if they’re illegally calculated.
Opponents of the deregulation bill – including many Florida-based insurers – say it would punish the very companies that filled the gap when major insurers starting shedding policies.
"We need more smaller insurers competing not fewer large insurers who dominate and can basically hold us hostage and charge any rate they want," said Brad Ashwell, a legislative advocate with Florida PIRG.
Consumer groups opposed to the bill include Florida Consumer Action Network, Consumer Watchdog, Center for Economic Justice, United Policyholders, Insured’s Public Action Coalition and Floridians In Action.
Florida residents who are interested in weighing in on the legislation can contact Crist’s office at [email protected] or (850) 488-4441.
Julie Patel can be contacted at [email protected] and 954-356-4667.
