Politics

Kevin McCarty to Provide Insurance Fixes to Lawmakers in January

By: Michael Peltier News Service of Florida | Posted: December 6, 2012 3:55 AM
David Simmons and Kevin McCarty

Senate Banking and Insurance Committee Chairman David Simmons and Florida Insurance Commissioner Kevin McCarty

Florida's top insurance official on Wednesday was given a January deadline to come up with a series of proposals to reduce the size of the state-backed Citizens Property Insurance Corp. and to further reduce costs in the state's auto-insurance market.

Florida Insurance Commissioner Kevin McCarty said he would comply with requests from Senate Banking and Insurance Committee Chairman David Simmons, R-Maitland, who said depopulating Citizens and restoring the state's private insurance market was one of his top priorities as he starts two years as head of the committee.

Simmons also called on McCarty to put forward proposals to further reduce costs of the state's personal-injury protection insurance, or PIP, after auto insurers failed to reduce rates significantly despite legislative changes put in place last year to curb costs. Those plans are due two weeks after he submits his Citizens plans.

"Thanks for the early Christmas presents," McCarty quipped to Simmons.

McCarty wasn't the only one receiving marching orders. Simmons called on insurance industry representatives, coastal residents and anyone else who has a stake in the Florida property insurance market to submit proposals for the committee to consider at its next scheduled meeting in early January.

Simmons said regulators and other stakeholders need to become more proactive in finding ways to reduce the state's reliance on Citizens, which now handles about 1.5 million policies, nearly 25 percent of the entire market.

"We've given you a lot to do," Simmons said. "We've given the stakeholders a lot to do … Let's go ahead and get that done."

Sen. Jeremy Ring, D-Margate, said the state should also consider helping out private insurance companies by using the financial clout of the Florida Hurricane Catastrophe Fund to provide lower cost reinsurance to carriers. That idea drew support from Sen. Tom Lee, R-Brandon, who applauded Simmons for taking on the issue head-on, but cautioned that a long-term solution may be years away.


Comments (1)

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2:14PM DEC 6TH 2012
Sen. Jeremy Ring, D-Margate, said the state should also consider helping out private insurance companies by using the financial clout of the Florida Hurricane Catastrophe Fund to provide lower cost reinsurance to carriers.

Are you kidding me - redo of the Charlie Crist, manipulate the market while putting a greater financial risk on Floridians if the Cat Fund can't meet its obligations!@!! - NO THANK YOU


Simmons called on insurance industry representatives, coastal residents and anyone else who has a stake in the Florida property insurance market to submit proposals for the committee to consider at its next scheduled meeting in early January.

Return Citizens to being the insurer of last resort - right now, anyone can essentially choose Citizens if their rates are lower... this puts 75% of the market on the hook if Citizens does not have the resources to pay claims... Politicians need to start representing the 75%, and ensure those who cannot get a private policy - more like 10% of the overall market - and end up with Citizens, have them pay actuarially sound rates.

How do you do this?

1) Require three rejection letters from private insurers to accompany any new or renewal policy with Citizens. Right now, Citizens is not the insurer of last resort... I am sure there are many who are selecting Citizens because of the government imposed rate suppresion.

2) Do away with the 10% glide path. What was originally set up as a means to bring Citizens rates in-line with private insurers (When Crist and McCarty were rejecting any rate increase request), but has since been a hinderance to that goal now that private insurers can and are receiving rate increases of greater than 10%.

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