Private property insurers might as well abandon their slim hopes for permission from the state to raise their rates, at least for the remainder of this legislative session.
A Senate challenge to Gov. Charlie Crist’s vow to defeat any measure to raise residential property insurance rates was halted by its sponsor Tuesday.
The House version of the bill has rolled over to its third reading, but Sen. Mike Bennett, the bill's sponsor in the Senate, said Tuesday he doesn't believe it will fare any better than it has in the upper chamber. "I think it will probably freeze where it is, too," he said.
The Senate Policy and Steering Committee on Ways and Means was scheduled to vote Tuesday to allow private insurers to annually increase residential insurance rates to as much as 10 percent above the statewide average. But Bennett, R-Bradenton, told the committee at its last meeting this session to postpone a vote on the bill.
“We’re trying to find ways to find an agreement with the governor’s office, and we have been unable to do so at this stage,” said Bennett.
SB 876 and HB 447 call for the state to permit private insurers to raise insurance rates and lessen the power of the state Office of Insurance Regulation, and supporters have faced an uphill battle since the bills were proposed.
This is the second consecutive year lawmakers have tried to raise rates in opposition to repeated vows from Crist to defeat them.
Crist vetoed a similar attempt last session to maintain a cap on insurance rates that has been in place since 2007, and he has promised to do so again to any legislation that would raise rates.
Bennett said that Crist has sided with state Office of Insurance Regulation Commissioner Kevin McCarty, who is against Bennett's bill. Bennett made no attempt to hide his contempt, saying McCarty has “proven totally incompetent.”
The anger stretched across the Capitol to the House. Vocal supporter of the measure Rep. Alan Hays, R-Umatilla, fumed about its fate.
“Unfortunately, it is dead at this juncture,” he said. “It is taking a terrible, terrible risk.”
Lynne McChristian, Florida representative for the nonprofit Insurance Information Institute, said allowing insurers to raise rates will give them the reserve money they need to issue premiums.
Since the cap was installed, private insurers have had trouble making profits. An Insurance Information Institute chart shows private insurers’ profits went from $3.70 to $2.10 billion from 2007 to 2008.
Proponents of rate increases have pointed to the fact that Citizens Property Insurance Corp., the state-run insurer-of-last-resort that has proven to be serious competition for private insurers, has absorbed tremendous risk. Florida TaxWatch, a nonprofit government watchdog, has recommended that Citizens be allowed to raise its rates.
“It is important that all insurers in Florida be actuarially sound so the company can pay claims,” said TaxWatch spokesman Robert Weissert after Bennett pulled his bill.
Hays said the move to raise rates has to fare better next year under a new governor who will be open to increases.
“We’ve got to get somebody who is honest with the people and will tell the whole truth,” he said.
Reach Alex Tiegen at atiegen@sunshinestatenews, or at (561) 329-5389.