Gov. Charlie Crist vetoed a bill that might have tempted State Farm to keep writing policies in Florida.
TALLAHASSEE -- Resisting pressure from a chorus of large and politically influential industry groups, Gov. Charlie Crist on Wednesday vetoed legislation aimed at enticing large property insurance companies to write policies in Florida.
The decision all but ensures State Farm Florida will push ahead with plans to stop writing policies for property owners here, an exit that insurance experts warn could be devastating to hurricane-prone Florida.
Critics of HB 1171 praised the veto as a move that keeps property insurance affordable for Floridians.
In the letter explaining his decision, Crist cited his concerns about Floridians being faced with higher insurance costs in challenging economic times.
HB 1171 would have made it easier for big insurers like State Farm to raise customers' premiums, now subject to significant state regulation. State Farm executives say state regulators are not allowing them to charge realistic rates that cover their potential storm losses, and they have announced plans to gradually withdraw from the insurance market here.
State Farm officials never explicitly promised to stay if HB 1171 became law, but in a June 16 letter to Crist, State Farm Florida President Jim Thompson said passage of the legislation would prompt the company to reexamine its options for dealing with the company's ''rapidly deteriorating financial condition'' in the Sunshine State.
Crist's veto came in spite of a letter-writing and e-mail campaign by powerful groups such as the Florida Chamber of Commerce, Florida Bankers Association and Associated Industries of Florida that urged Crist to sign the bill.
Florida Chamber of Commerce spokesman Dan Krassner said the veto was expected, and Chamber President Mark Wilson will ''work closely with the governor'' to craft legislation for next session. ''We have to fix the insurance situation,'' Krassner said. "We're just hoping we don't have a hurricane this summer.''
Small Florida-based companies had opposed the bill because only the larger, national companies would have been allowed to offer a new insurance policy with deregulated rates, given the surplus requirements the new law would have mandated.
This bill ''would have left a lot of companies unable to compete,'' said Roger Desjadon, president and chief executive officer of Florida Peninsula Insurance.
Desjadon believes it wouldn't have been good public policy because it would have deregulated activities for some companies but not all, "creating the potential of unleveling the playing field.''
Meanwhile, a number of smaller companies have entered Florida in recent years. Some insurance experts and lawmakers worry they have neither the assets nor experience to cover the losses from a catastrophic hurricane.
Bill sponsors Rep. Bill Proctor and Sen. Mike Bennett issued a joint statement making clear their ''disappointment'' with the veto -- and hinting at the possibility of a veto override, which would require a two-thirds vote of the two chambers of the Legislature.
When the bill passed this session, 85 percent of lawmakers voted yes.