Ten months ago, State Farm was the scourge of Tallahassee when it announced plans to pull out of Florida's property insurance market.
Good riddance, Gov. Charlie Crist said at the time. "Floridians will be much better off without them.''
Insurance Commissioner Kevin McCarty insisted there was no cause for alarm, that some 700,000 homeowners policies shed by the biggest private insurer in the state would largely be absorbed by Florida startups.
Now regulators have changed their tune and say there's at least a chance that part of State Farm's homeowners business will stay.
McCarty and his deputies say they're "cautiously optimistic." They praise the value of having the good neighbor around.
"The commissioner has stated it would be beneficial for everyone if they did keep a presence here," McCarty spokesman Jack McDermott said Friday.
Not State Farm, which says, at least publicly, that it is still leaving and only negotiating with the state over terms of its withdrawal. Its hard-line stance is that its premiums are "woefully inadequate," making it impossible to stay.
The biggest difference between the Florida of 10 months ago and now: McCarty and his team of regulators are increasingly willing to approve premium hikes and give property insurers other incentives to keep them happily insuring.
State Farm's threat to pull out came after the state rejected its request for an average rate increase of 47 percent. Since then:
• Insurance regulators have approved numerous homeowners rate increases across the state. Universal Property and Casualty, the second-biggest private insurer behind State Farm, got the green light for an average 14.6 percent increase.
• Citizens Property Insurance, the state-run insurer for those who cannot find coverage in the open market, was approved for an average 5.4 percent rate hike for its base homeowners' policies and has a pending request for an average 7.7 percent increase for high-risk properties.
• Regulators said State Farm Florida could eliminate or reduce some discounts it offers its policyholders, effectively increasing premiums for homeowners as much as 28.4 percent. The decision will bring in $278 million in additional premiums for the company after all policies come up for renewals starting Dec. 1.
• There's a growing backlash against state-mandated mitigation credits that property insurers must give to those who take steps to shore up their homes against potential hurricane damage.
Insurers have criticized the program for depleting their premiums and say it is susceptible to fraud. Citizens Property recently approved a controversial $60 million "emergency plan" to inspect for cases of fraud among 400,000 policyholders who have received credits.
Arguably one of the most significant changes: Regulators have toned down their rhetoric against State Farm and other insurers. Despite another mild hurricane season, McCarty recently said he is sympathetic that property insurers deserve increases because they are receiving less in premiums and paying more for reinsurance.
State Farm spokesman Chris Neal said his company appreciates the attitude change.
"The tone has changed from last January when we filed our withdrawal," he said. "At least we're talking."
Still, Neal is adamant that "nothing has fundamentally changed.
"We do believe we're having very productive negotiations, but what we're negotiating is the withdrawal. … It's just that simple," he said.
"Our risk is still way too high, and our premiums are woefully inadequate. Until that changes, the only responsible thing that we can do is continue to seek to withdraw from this market."
The operative words being "until that changes."
Crist and McCarty are under a spotlight to keep as many insurance policies as possible in the hands of private insurers. A plan to grow Florida homeowners insurance companies has moved slowly, reflected by the fact Citizens still has more than 1 million policies. And that's before State Farm's mega-cancellation plan has even begun.
McDermott said each rate filing is considered on its own merits. Yet he leaves the door open for higher State Farm rates: "We've never stated we would not give them a rate increase," he said.
For now, both sides continue to talk as they've repeatedly postponed their case over the withdrawal plan terms now pending before the state Division of Administrative Hearings.
State Farm recently requested to postpone the hearing once more, pushing it to Jan. 25.
"If we didn't feel we were making progress, we wouldn't be doing that," Neal said.
In the end, State Farm may not get all of the 47 percent rate hike it originally demanded to stay. But its poker hand has gotten stronger.
Some have long argued the State Farm pullout has been a bluff from the start to angle for a huge rate hike.
If so, McCarty isn't calling their bluff. Rather, he's showing his hand at just how eagerly he wants State Farm to stay at the table.
Jeff Harrington can be reached at email@example.com or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.