THE NEWS SERVICE OF FLORIDA: Proctor spars over insurance dereg bill
Jun 5, 2009
As Gov. Charlie Crist decides whether to sign a bill (HB 1171) that would allow some large property insurance companies to raise rates without state regulatory approval, the measure’s sponsor has written to Insurance Commissioner Kevin McCarty to make several points about the bill.
A letter from Rep. Bill Proctor (R-St. Augustine) in part is in response to McCarty’s suggestions about the strength of the insurance market. The Proctor bill is aimed at keeping some large insurers here. Some, including State Farm, the state’s largest private home insurer, are looking at leaving the market because of their inability to raise rates. McCarty’s office has said, essentially, that the state’s residents will have adequate insurance without some of those large insurers, and pointed to about 40 new smaller companies that have entered the market.
Proctor said in his letter sent last week that he had “reservations regarding (the) combined claims-paying capacity” of the new companies and sent McCarty a list of questions about them, such as whether they’re rated by independent rating companies and, if so, what those ratings are.
Proctor also tried to move the discussion beyond State Farm. Some lawmakers had pushed for the bill saying it might keep State Farm here, although the company said repeatedly it wasn’t behind the bill. Proctor backed the company up in his letter, saying the measure actually arose from a constituent’s experience with another insurer.
“The impetus for House Bill 1171 dates back to 2007 when a constituent asked why he could not retain his policy with USAA, as he was willing to pay the rate the company was quoting,” Proctor said.
Proctor said that beyond the issue of whether State Farm remains in Florida is the larger question of the state’s ability to make sure claims are paid.
“I find it difficult to accept that Citizens, 40 new companies, and what is likely to be a remnant of national companies comprise an adequate homeowner’s insurance program, nor do I believe that such a program can be established in the absence of well capitalized national companies competing on the basis of “market-based” pricing.”