Florida Home Insurance Bill Vetoed By Governor Charlie Crist
Florida Property Insurance Bill Generates Controversy amongst Insurance Industry
Florida Governor Charlie Crists decision to veto an omnibus property insurance bill, SB 2044, has generated a considerable level of controversy after he was urged to sign it by homeowners insurance industry trade organizations, executives, and even Florida Insurance Commissioner Kevin McCarty. Despite the recommendations of those who backed the bill, Gov. Crist, who has left the Republican Party to run as an independent for the U.S. Senate, expressed concern over potential Florida home insurance rate hikes that may have resulted from the bill. In his veto message, Gov Crist stated, I am most concerned about the expansion of the current expedited rate filing procedure for property insurers that makes it easier to increase Floridians' premiums.
Although the bill was indeed expected to increase home owners insurance rates, supporters of the bill assert that the increased rates and reduced claims costs that the bill entailed were imperative to avoid massive financial risk associated with the 2010 Atlantic hurricane season and ensure future stability in the Florida homeowner insurance market. According to a statement issued by the Property Casualty Insurers Association of America (PCI), for example, without the bill, we continue to confront the problem of a huge and growing financial risk that Floridians face from the next storm. Others, such as current Florida Senate President Jeff Atwater, have taken a more personal approach to expressing outrage over Gov. Crists actions: He yet again has found a way to mischaracterize the substance of legislation to advance his own political career, said Sen. Atwater.
Most of the rationale for the Florida homeowners insurance industrys overwhelming support for the bill has derived from recent increases in costs that have troubled property insurers. These costs have largely been a result of rising non-catastrophe and sinkhole claims, as well as claims from Hurricane Wilma that claims adjustors are now reopening. Among the industry officials disappointed with Gov. Crists veto is the Florida Property & Casualty Association, an organization of insurance companies and consultants, who said that SB 2044 would have made Florida home owners insurance more accessible and affordable to consumers as a result of decreased claims and fraud abuse. The group issued a statement, saying, Unfortunately, it was erroneously portrayed by critics as a bill that would have raised rates without regulatory oversight. Nothing could be further from the truth. The veto of this bill will ultimately saddle all insurers with continued escalating losses resulting in less availability and higher rates.
Despite the urgings of the insurance industry, Gov. Crist viewed the bill as more detrimental than beneficial, explaining that During these very difficult economic times, Florida's consumers should not have to be concerned with an additional premium increase to their policy.
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