Not one Floridian has been spared from the challenges of these tough
economic times. Yet a bill that would allow a select few, big property
insurance companies to sneak unrestrained, unregulated and unrelenting
rate hikes on unsuspecting consumers will arrive at Governor Crist’s
desk over the coming days.
The Residential Property Insurance Bill HB 1171 is one of the
most egregious examples of anti-consumer legislation to come out of the
2009 legislative session, and, if signed into law, will allow the
largest insurance companies to raise rates unchecked. This bill deserves
a clear veto from Governor Crist.
Disguised as a “consumer-friendly” measure, when it is anything
but, HB 1171 would allow the largest insurance companies to raise rates
without state approval.
Under current law, the Office of Insurance Regulation OIR) must
approve requests for rate increases filed by insurers. This protects the
public and the companies by ensuring that insurance rates are not
excessive, inadequate, discriminatory or unlawful.
The problem is that this bill would remove consumer protections
by no longer allowing the OIR to protect Floridians from excessive or
discriminatory rate hikes as Kevin McCarty and his office have
successfully done time and time again.
If HB 1171 becomes law, major insurance carriers would not only
be able to charge whatever they like, they would also be able to game
the system by manipulating rates, quoting excessive premiums to coastal
homeowners, then dropping those policies if they choose to so they can
maintain and grow inland policies where there is less exposure. The lack
of predictability this would create is exactly what we don’t need in a
state with an already fragile and overstrained property insurance
market.
And perhaps the most troublesome provision is that the bill would
help further grow the surpluses of these larger insurers while
preventing small Florida-based carriers from doing the same. In this way
the bill aims to provide an unfair competitive advantage to larger
companies by discouraging across the board competition with smaller
carriers. This would ultimately harm consumers and businesses by
fostering an insurance market offering fewer choices in terms of
dependable insurers. It’s also important to recognize that there’s no
guarantee these large companies will continue writing policies in
Florida.
Rather than deregulating the market, which hasn’t worked out in
the past, we should be working on policy goals that support a more
competitive insurance market that provides consumers with more
affordable options. In short, we need more Florida-based companies
competing, not fewer large insurers who dominate the market, essentially
holding homeowners hostage, charging any rate they choose.
Governor Crist has already indicated some reservations about
signing this bill. I implore him to continue that smart thinking and to
continue looking out for the best interests of Florida’s insurance
consumers.
Consumer advocates across the state are expressing similar
concerns including the Florida Public Interest Research Group, the
Consumer Federation of the Southeast, the Florida Consumer Action
Network, Consumer Watchdog, the Center for Economic Justice, United
Policyholders, Insured’s Public Action Coalition, Floridians In Action
as well as Florida’s Insurance Consumer Advocate Sean Shaw.
As Florida residents continue to weather an economic crisis, they
cannot afford to be caught in a volatile insurance market faced with
erratic rate increases. Governor Crist has always been an advocate for
the people of Florida – we need him now more than ever and urge him to
veto this anti-consumer measure.
I urge concerned citizens to call the governor’s office of
Citizens Services at 850) 488-4441 or e-mail the governor at Charlie.Crist@myflorida.com
asking to protect consumers by vetoing HB 1171.
Brad Ashwell is the consumer advocate for the Florida Public
Interest Research Group www.floridapirg.org).