Despite a reminder from the governor that he doesn't like the bill, a Senate committee on Wednesday pushed through a plan to allow property insurance companies to raise rates without regulatory approval.
Passage of the measure in the Senate Banking and Insurance Committee followed testy exchanges between members of the divided panel, hostile questions of an insurance company lobbyist and state regulatory officials, and a vote against allowing actual debate on the bill before a vote.
The committee did spend considerable time on questions about the bill that bordered on debate, but used up the committee's time with those questions and took a vote on the bill without allowing members to actually debate for or against the measure, over the objection of opponents. The vote on the bill was 6-4, sending the bill on to the General Government Appropriations Committee.
The bill was amended Wednesday by its sponsor in an effort to give some comfort to opponents that insurance companies won't hit customers with enormous rate increases if the bill passes though it clearly didn't offer that comfort.
The measure (SB 876) initially would have allowed any increase in rates without the approval of the Office of Insurance Regulation, relying on the market and consumers' ability to seek alternative insurance such as state-backed Citizens Property Insurance - to keep premiums from going too high.
But with Gov. Charlie Crist signalling strongly that he would veto the bill as he did a similar measure last year, the bill's sponsor, Sen. Mike Bennett, amended it to cap the amount that companies could seek to increase rates without OIR approval at an average of 5 percent in the first year, 10 percent in the second and 15 percent on average in the third year.
The bill's most vocal opponent, Sen. Mike Fasano, R-New Port Richey, said that was little comfort. An increase of 15 percent on average could mean a much higher increase for some people a couple years down the road - if they see increases in multiple years, the hike could exceed 30 percent.
Do you think a senior citizen on fixed income who saw no increase in their social security check .... would be able to afford these rate increases? Fasano asked.
But Bennett and insurance industry backers of the bill said that without allowing companies to raise rates some, there's a possibility the insurance market in the state will crash. Already, Florida taxpayers could be on the hook for a particularly big hurricane, and companies don't want to do business in the state, they said.
Besides, State Farm lobbyist Mark Delegal said, even with the ability to raise rates without state approval, the company still faces market pressures.
If we jump our rates up 50 percent, we're going to lose business, Delegal told the committee. The best protector of consumers is a competitive marketplace where consumers get to decide, what's the best price for them.
In addition to Fasano, Republican Sens. Ronda Storms and Alex Villalobos joined Fasano in tenacious questioning about the effect of the bill. Sen. Joe Negron, R-Stuart also joined those three in voting against the bill.
Voting for the measure in addition to the sponsor were the panel's chairman, Sen. Garrett Richter, R-Naples, Sen. JD Alexander, R-Lake Wales, and the three Democrats on the committee, Sen. Al Lawson, Sen. Jeremy Ring and Sen. Chris Smith.
Crist showed up at the beginning of the meeting to urge the panel to reject the bill. Last year, a similar measure that would have allowed certain large insurance companies to raise rates without regulatory approval passed the Legislature but was vetoed by Crist, who cited the potential for large rate increases as one of the reasons. Crist is running for the U.S. Senate, and while he's long taken pro-consumer positions, it's a safe bet that in an election year he likely wouldn't sign legislation that results in consumers seeing insurance premium hikes.
While the committee was polite to Crist, other officials came in for some tough questioning. Opponents of the bill hounded State Farm representative Delegal about the company's profits and where its money is going if it needs higher rates in a year that had no major hurricanes. Delegal responded that the company's biggest cost is reinsurance.
On the other side, backers of the bill, particularly Bennett, badgered an official from the state Office of Insurance Regulation about how many property insurance companies are writing policies in Florida. The official dutifully gave the committee numbers, but Bennett pointed to problems he found with a recent report from the agency and said he didn't believe the numbers.
Afterward Bennett said he's working on trying to get the governor's office on board with the bill to avoid a veto if the measure again passes the Legislature.