Opinion: U.S. Senator Marco Rubio’s Insurance Spin
Dec 15, 2011
The following article was published in the Wall Street Journal on December 15, 2011:
Marco Rubio’s Insurance Spin
By Mary Kissel
When former Florida Gov. Charlie Crist pushed to expand his state’s catastrophic insurance funds in 2007, one of his strongest backers was Marco Rubio, who at the time was a state legislator. Now that the funds are in fiscal trouble and a new governor, Rick Scott, is pushing to reform them, has Mr. Rubio — a well-known fiscal conservative now serving in the U.S. Senate — changed his tune?
It’s a pertinent question given Mr. Rubio’s prominent involvement in the expansion of the Florida Hurricane Catastrophe Fund, a reinsurer, and Citizens Property Insurance Corp. As speaker of the Florida House of Representatives, he ignored warnings that expanding the two taxpayer-backed funds would expose Floridians to fiscal risks when a big storm (or a series of small storms) hit. He also allowed state Senate Democrats considerable influence over the legislative process and then demoted the two Republican committee heads, Don Brown and Dennis Ross, who voted against the measure.
Mr. Rubio was probably acting out of political expediency. In 2007, Mr. Crist was newly elected and very popular. Insurance companies hiked rates after two active hurricane seasons in 2004 and 2005, and Floridians were calling for relief. Mr. Rubio was a young House speaker and felt pressure from Democrats and fellow Republicans to “do something.” After the 2007 law boosted the Catastrophe Fund and Citizens, private insurers promptly curtailed their business in the Sunshine State or left altogether. Then the financial crisis happened and the two insurance funds realized they had potentially large funding gaps.
Earlier this month, Boca Raton state Rep. Bill Hager proposed a bill that would shrink the Cat Fund, as the reinsurer is known. Gov. Scott recently asked the board of Citizens to work on reforms for that fund, too. Sen. Rubio’s office declined to comment specifically on Mr. Hager’s bill Wednesday, but spokesman Alex Conant said that Mr. Rubio “does agree that the system needs to be reformed” and added that the 2007 reforms “were never supposed to be permanent.”
A temporary measure may be what Mr. Rubio intended, but nothing in the bill said it was anything but permanent. Better for the senator to acknowledge a bad decision and throw his considerable political weight behind Gov. Scott’s reform efforts.