Crist Signals Opposition To ‘Consumer Choice’ Bill

NU Online News Service, May 28, 11:36 a.m. EDT
Florida Gov. Charlie Crist yesterday indicated he may veto the “Consumer
Choice” bill that would eliminate rate restrictions on some home
insurance.
The governor said an unregulated insurance industry would be unfair to
consumers.
His comments came as controversy mounted over the measure and the bill’s
sponsor called the state insurance commissioner “duplicitous” in
voicing opposition to the legislation.
Provisions of the bill, HB1171, would allow some insurers to charge
rates above those approved by the Office of Insurance Regulation
provided they have a surplus of at least $200 million and a ratio of net
written premium to its surplus of no more than two to one.
During a press conference yesterday, Gov. Crist said he believes
regulation is important for both the state and Florida consumers. “To
have that industry unregulated in essence is not something that is
appealing to me nor is it fair to the customer,” he said.
Consumer groups also protested HB1171 during a press conference held
yesterday.
Walter Dartland, executive director, Consumer Federation of the
Southeast, said he estimated around 30 insurance companies will be able
to change rates at will, creating an unlevel playing field for the
state’s smaller domestic companies. He called the measure a bailout for
the larger insurers such as State Farm.
“This should be a no-brainer veto,” he said.
He added that if State Farm is unsatisfied with its disapproved rate
filing, it should re-file and prove its case.
Brad Ashwell, legislative advocate, Florida Public Interest Research
Group, said the bill would lead to unpredictable insurance rates, and
allow big companies to cherry pick risks. He said people could be lured
to the companies by lower rates, and then see their prices subsequently
raised.
Earlier this month, Gov. Crist received a letter from Insurance
Commissioner Kevin McCarty asking him to veto HB1171.
The commissioner’s letter sparked a strong reaction from bill sponsor
State Senator Michael S. Bennett, R-Bradenton, who wrote to Commissioner
McCarty that the bill was crafted with input and guidance from the
Office of Insurance Regulation OIR). He also said the OIR was outspoken
in its neutrality on the bill.
Sen. Bennett said in the letter he was then “ambushed by a press release
from [OIR] opposing the bill.” After expressing his displeasure, Sen.
Bennett said Commissioner McCarty agreed to withdraw the press release,
and told Sen. Bennett in a subsequent meeting that he would not oppose
the bill and would not ask the governor to veto it.
“To my dismay,” Sen. Bennett wrote, “I received an email copy of a
letter from you to Governor Crist, essentially asking the governor to
veto House Bill 1171.”
Sen. Bennett also wrote a letter to Gov. Crist requesting the
resignation of Commissioner McCarty, calling him “duplicitous and
untrustworthy.”
Ed Domansky, spokesman for the OIR, said Commissioner McCarty has been
in public service for over 20 years, and stands behind his record of
service to the people of Florida.
While he did not speak specifically to any of Sen. Bennett’s
allegations, Mr. Domansky said McCarty’s letter to Gov. Crist contained
comments that were consistent with testimony by OIR officials to the
legislature.
Gov. Crist expressed his confidence in Commissioner McCarty following
Sen. Bennett’s letter, said a spokesman for the governor.