Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Crist rejects bill that aimed to lure property insurers to Florida

TALLAHASSEE — Resisting pressure from a chorus of large and politically influential industry groups, Gov. Charlie Crist on Wednesday vetoed legislation aimed at enticing large property insurance companies to write policies in Florida.

The decision all but ensures that State Farm Florida will push ahead with plans to stop writing policies for property owners here — an exit that insurance experts warn could be devastating to hurricane-prone Florida.

Critics of HB 1171 lauded the veto as a move that keeps property insurance affordable for Floridians.

In a letter explaining his decision, Crist cited his concerns about Floridians being faced with higher insurance costs in challenging economic times.

HB 1171 would have made it easier for big insurers like State Farm to raise customers' premiums, now subject to significant state regulation. State Farm executives say state regulators are not allowing them to charge realistic market rates that cover their potential storm losses, and they have announced plans to withdraw from the insurance market here within two years. The company insures more than 1 million Florida properties.

By relaxing rate regulation, lawmakers hoped to lure State Farm and other large companies back to Florida.

Bill sponsors Rep. Bill Proctor, R-St. Augustine, and Sen. Mike Bennett, R-Bradenton, issued a statement making clear their "disappointment" with the veto — and hinting at the possibility of a veto override, which would require a two-thirds vote of both chambers of the Legislature.

When the bill passed this session, 85 percent of lawmakers voted yes.

State Farm officials never explicitly promised to stay if HB 1171 became law, but in a June 16 letter to Crist, State Farm Florida president Jim Thompson said passage of the legislation would prompt the company to re-examine its options for dealing with the company's "rapidly deteriorating financial condition" in the Sunshine State.

After the veto, State Farm Florida spokesman Chris Neal said the company is still negotiating its withdrawal plan with regulators, but "We have no choice but to proceed. We're disappointed, like the majority of the Legislature and hundreds of thousands of consumers."

Crist's veto was not surprising, given his outspoken disdain for the rates charged by large insurers. As governor, he has focused on lowering property taxes and insurance.

But the veto came in spite of a letter-writing and e-mail campaign by powerful groups such as the Florida Chamber of Commerce, Florida Bankers Association and Associated Industries of Florida that urged Crist to sign the bill.

Florida Chamber of Commerce spokesman Dan Krassner said the veto was expected, and chamber president Mark Wilson will "work closely with the governor" to craft legislation for next session. "We have to fix the insurance situation," Krassner said. "We're just hoping we don't have a hurricane this summer."

Bill supporters, including Florida Tax Watch and groups representing Realtors, home builders, and mortgage brokers, argued that consumers should have the choice of paying more for a proven, financially solvent company like State Farm.

The head of the insurance project at the Competitive Enterprise Institute, a Washington think tank, quickly attacked Crist's decision. "Charlie Crist has declared war on Florida homeowners. He is taking away choices, taking away the market, and taking away freedom," said Eli Lehrer, director of CEI's Center for Risk, Regulation and Markets. "He is working against Floridians' interests. This is a sad day for the state."

The Florida chamber recently released a poll that found 60 percent of Florida voters believe Crist should sign HB 1171, while 24 percent disagreed. That poll also found that over 60 percent polled across party lines said paying lower rates is not as important as knowing the insurance company has the assets to pay out claims.

Currently, the state-run Citizens Insurance has a little more than 1 million customers.

Crist has already signed into law a bill that allows Citizens to gradually raise its rates, by a maximum of 10 percent a year for individual policyholders.

The goal is to reduce Florida's hurricane exposure and economic risk by boosting cash assets and decreasing financial liability in Florida's Hurricane Catastrophe Fund. The fund is roughly $13 billion short of what would be needed to cover devastating property damage.

Citizens' rates have been frozen since 2007. Under the law, rate hikes would not take effect until next year.

Meanwhile, a number of smaller companies have entered Florida in recent years. Some insurance experts and lawmakers worry they do not have the assets or experience to cover the kind of losses that would come from a catastrophic hurricane.

Shannon Colavecchio can be reached at scolavecchio@sptimes.com or (850) 224-7263.

Crist rejects bill that aimed to lure property insurers to Florida 06/24/09 [Last modified: Wednesday, June 24, 2009 9:09pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Trigaux: How Moffitt Cancer's M2Gen startup won $75 million from Hearst

    Business

    TAMPA — A Moffitt Cancer Center spin-off that's building a massive genetic data base of individual patient cancer information just caught the attention of a deep-pocketed health care investor.

    Richard P. Malloch is the president of Hearst Business Media, which is announcing a $75 million investment in M2Gen, the for-profit cancer informatics unit spun off by Tampa's Moffitt Cancer Center. Malloch's job is to find innovative investments for the Hearst family fortune. A substantial amount has been invested in health care, financial and the transportation and logistics industries.
  2. A boat lays on its side off the shore of Sainte-Anne on the French Caribbean island of Guadeloupe, early Tuesday, Sept. 19, 2017, after the passing of Hurricane Maria. [Dominique Chomereau-Lamotte | Associated Press]
  3. 7.1 magnitude quake kills at least 149, collapses buildings in Mexico

    World

    MEXICO CITY — A magnitude 7.1 earthquake stunned central Mexico on Tuesday, killing at least 149 people as buildings collapsed in plumes of dust. Thousands fled into the streets in panic, and many stayed to help rescue those trapped.

    A woman is lifted on a stretcher from of a building that collapsed during an earthquake in Mexico City, Tuesday, Sept. 19, 2017. [Rebecca Blackwell | Associated Press]
  4. FHP seeks semitrailer truck driver that left fiery wreck on I-75

    Accidents

    TAMPA — The Florida Highway Patrol is looking for the driver of a semitrailer truck that sped off from an Interstate 75 crash that left another car burning on Tuesday afternoon.

    Troopers were looking for the driver of a semitrailer truck that sped off from an accident scene on Interstate 75 in Tampa on Tuesday afternoon that caused a car to catch fire. [Courtesy of Florida Highway Patrol]
  5. Joe Maddon gets warm reception in return to the Trop

    The Heater

    ST. PETERSBURG — The night was arranged to honor former Rays manager Joe Maddon in his first visit back to the Trop, and the standing ovation from the bipartisan crowd and scoreboard video tribute seemed proper acknowledgments of his hefty role in the Rays' success during his nine-year stint.

    Chicago Cubs manager Joe Maddon (70) talks with reporters during a press conference before the start of the game between the Chicago Cubs and the Tampa Bay Rays at Tropicana Field in St. Petersburg, Fla. on Tuesday, Sept. 19, 2017.