Advance Coverage: Governor Seeks Legal Action Against Florida Property Insurers

Dec 18, 2007

Governor Crist continued his individual interviews today with various members of the Capitol Press and informed them of his intention to seek legal action against Florida property insurers. Following are additional newspaper blog entries that were posted late this afternoon on the topic.

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St. Petersburg Times Buzz Blog
Posted by Steve Bousquet at 5:19 PM

Crist seeks class action lawsuit against insurers

Gov. Charlie Crist has enlisted the help of three high-powered lawyers in an effort that may lead to a class action lawsuit against Florida’s insurance industry.

Crist said Tuesday the three will review insurers’ responses to subpoenas issued earlier by the state Office of Insurance Regulation for compliance with a new law requiring the companies to pass cost savings on to rate payers.

“(I want them) to review the subpoena responses that are coming back from the insurance companies and to start to develop a theory to pursue legal action against those who may not be adhering to the letter of the law — possibly including a class action,” Crist said.

The three lawyers, who are donating their time for free, are Robert Martinez of Coral Gables, who headed Crist’s transition effort a year ago and is a member of the state Board of Education; Dexter Douglass of Tallahassee, a Democrat who was Gov. Lawton Chiles’ general counsel;  and Robert Hackleman, a member of the firm that employed George LeMieux, Crist’s chief of staff, at Gunster, Yoakley and Stewart.

“He’s a great trial lawyer, and I’ve  gotten to know him through George,” Crist said of Hackelman. “So I have great respect for his judgment.”

Crist said he chose Douglass in part because of his experience with Chiles’ legal onslaught against the tobacco industry in the mid-1990s.

Miami Herald Blog
Posted by Beth Reinhard at 05:52 PM

Crist seeks tobacco-style lawsuit against insurance firms

Railing against the failure of the  insurance industry to pass on savings to Floridians after the state took on more of the risk, Gov. Charlie Crist has appointed three high-powered lawyers to file a class-action suit against the industry on behalf of state residents.

“I’m increasingly concerned they are potentially violating the new law,” Crist said in an interview with The Miami Herald on Tuesday. “Common sense would dictate to you that if they are not passing on the savings to the customer, they are violating the law that says they must pass on the savings to the customer.”

Crist said his legal office has engaged the help of Roberto Martinez, a former U.S. attorney from Miami who chaired Crist’s transition team; Dexter Douglass, former general counsel to Gov. Lawton Chiles who worked on the state’s litigation against the tobacco industry, and Bob Hackleman, a Fort Lauderdale trial lawyer with Gunster, Yoakley and Stewart, the former firm of Crist’s chief of staff, George LeMieux. The lawyers will work at no cost to the state, he said.

Martinez said his firm has been asked “to look at information relating to the rates being charged for property insurance in the State of Florida to determine whether there is the basis for legal action” but he couldn’t comment further.

The lawyers are reviewing the financial documents the industry filed under oath with the Florida Office of Insurance Regulation and will file a lawsuit against them ‘‘as soon as possible,” Crist said.

“I don’t know how long that process is going to take,” the governor said. “The idea is to get the people’s money back.”

He said many companies have lowered their rates ‘‘but those that have not should be accountable and there are consequences to violating the law if we can show that they have and I believe that they have.”

Since the law was passed in January, several major national companies, such as Allstate and Nationwide, lowered their rates very little or asked for a rate increase.

Smaller companies, many of them Florida-based, had the largest decreases. State Farm, the largest insurer in the state, agreed to a 9 percent decrease and Citizens Property Insurance, the state-run insurer which didn’t have to reduce rates, lowered its rates as well.

Orlando Sentinel Blog
Posted by Aaron Deslatte on Dec 18, 2007 6:04:46 PM

Crist taps trial lawyers to take on insurers

Gov. Charlie Crist has asked three prominent trial lawyers to review the property insurance industry’s compliance with an 11-month-old reform and recommend whether or not to sue the insurers.

At issue: the law passed that grew the size of the state’s hurricane catastrophe fund in the hope of lowering the cost of re-insurance to insurers. Those companies that bought from the state were supposed to then pass those savings on to policyholders.

Crist has railed for months that the industry has not lowered rates by the roughly 24 percent that the governor and Legislature were told the insurance legislation would save.

In recent months, Florida Office of Insurance Regulation has subpoenaed records from insurers like Allstate and reached settlement with State Farm to help in their investigation of whether insurers are colluding to thwart the law.

Now Crist’s office has enlisted the help of former Gov. Lawton Chiles general counsel Dexter Douglas, Bob Hackleman, a Fort Lauderdale lawyer with Gunster, Yoakley and Stewart, and former Miami U.S. Attorney and Crist transition chairman Robert Martinez to help.

“I’m frustrated with the fact that rates haven’t come down more, and I’m concerned about the legality of them not bringing the rates down,” Crist said recently in an interview with the Orlando Sentinel.

“The law says the savings enjoyed by the insurance company must be passed on to the consumers. Well, they’re not all doing it.”

Crist’s office said the legal team would look at the responses insurers have filed to the subpoenas and to review every company that has filed for a rate increase.

One of the options, Crist’s office said, is a class-action lawsuit.

“The real question here is why aren’t you adhering to the letter of the law,” Crist said.