Property insurance rate hearings in Tallahassee usually have all the drama of a calculus lecture. But one such hearing is shaping up as a Dodge City showdown: Florida Gov. Charlie Crist and Insurance Commissioner Kevin McCarty vs. State Farm Florida, the state's largest private insurance company.
This is about more than rates, industry analysts say. What happens could determine the extent that Florida's largest private insurance companies remain major players in the state.
For the proceeding, which will be part hearing and part investigation, Crist and McCarty want State Farm to turn over hundreds of internal documents detailing how the company does business in Florida.
The two sides were to square off today, but regulators postponed the hearing, likely until next month, saying State Farm needs to hand over more information.
Specifically, regulators want State Farm to explain its decision to drop 50,000 coastal policyholders, propose an auto discount and to withdraw from the condominium business in Florida.
State Farm officials say that the company is doing all it can to comply and that hardball tactics won't achieve what everyone wants: a stable market.
To add to the drama, McCarty has taken the unusual step of issuing subpoenas to State Farm Florida and its 84-year-old parent company, Bloomington, Ill.-based State Farm Mutual.
In the meantime, the insurance crisis boils.
What originally put State Farm in Crist and McCarty's crosshairs is backup coverage, known as reinsurance, that all insurers must buy to protect themselves against heavy losses from severe hurricanes.
State officials insist that laws easing insurers' access to lower-cost, state-backed reinsurance mean the 7 percent rate decrease State Farm promised its policyholders back in March should be closer to 11 or 12 percent.
State Farm counters that with about a million policyholders statewide, and more than 135,000 in the Tampa Bay area, it needs every dollar to guard against future storms. The company also says it, like every other property insurer, has until Sept. 30 to make its final, corrected rate filing.
So why is the state coming after them now?
"It would appear," suggested Gary Landry, vice president of the Florida Insurance Council, an industry lobbying group, "this is just showmanship."
Or an attempt by Florida to do what Mississippi did -- try to pull back the curtain and expose State Farm's inner workings.
After Hurricane Katrina hit the Gulf Coast in 2005, State Farm was confronted in Mississippi with a large number of wind-vs.-water lawsuits. The suits by policyholders argued that State Farm was responsible for paying claims for flood damage while the company argued that its policies covered only wind damage. But many cases in Mississippi settled in the homeowners' favor, and State Farm agreed to re-evaluate about 35,000 Katrina claims.
Homeowners there also accused State Farm of denying claims based on biased damage reports and of offering to settle claims for far below coverage limits, hoping homeowners would capitulate rather than sue.
State Farm denies both practices, but the company announced in February it had enough of the "untenable" legal and political climate and would stop writing policies in Mississippi.
Does State Farm see a similar climate developing in Florida if courts rule against them and regulators start digging through corporate records?
"Can it happen in Florida?" asked State Farm spokesman Chris Neal. "Of course. It happens all the time where a court will reinterpret a law or interpret it differently than we have.
"Every decision we've made is aimed at how we stay in the Florida homeowners market," Neal added. "But as we know, things can change quickly. This is a very volatile market we're in."
The state hearing, Neal said, is just part of doing business. "We're actually looking forward to it."
So is Tampa lawyer William "Chip" Merlin. But not for the same reason.
"Until you require people to turn over internal documents, e-mails and memorandum, you won't know the truth," said Merlin, who represents hundreds of homeowners in Mississippi and Florida.
"But when you start subpoenaing internal documents and calling witnesses to testify under oath, when you go into the little corners of State Farm where decisions are made, the real reasons will come out why expectations to reduce rates are so low."
As the wait for a State Farm hearing continues, other insurers are watching carefully.
"To the extent we've seen what happens in other places, it the hearing could open the door to those things happening here," said Allstate spokesman Adam Shores.
"What affects one company could affect everyone in the industry."