January 9, 2007


Consumer Coalition Calls For Insurance Solutions


Tallahassee , FL – Grassroots consumer groups joined together today to ask the Legislature to solve Florida ’s insurance crisis.  The groups reacted to insurance company proposals and made their own recommendations.  Several of the group’s leaders testified at a hearing of the Senate Insurance Committee today.  The groups are meeting with Legislators, regulators, and industry representatives this week in Tallahassee and one group plans a massive rally at the opening of next week’s special session on insurance. 


Ginny Stevans, President of Homeowners for Affordable Coverage, said, “People have come together from all over the state because we are being forced out of our homes by high insurance rates.  It has to stop.”  Altogether the consumer groups represent more than 100,000 Floridians.


The groups asked the Legislature to consider these six points:


  • Prior Rate Review – Insurance companies should have to prove rate increases are justified before billing consumers. Many states, including Texas , California and Alabama , currently have prior rate approval systems.  Even some Florida insurance companies abide by prior rate approval rules and do not implement rate changes until the changes are approved. We fail to see how “file and use” rates have helped the Florida market.

  • Improve My Safe Florida Homes – This program to retrofit Florida ’s existing homes is vital to solve the insurance crisis.  The Legislature should set a timetable to accomplish this.  How long will it take?  How many homes will be improved per year?  How much will it cost?  Also, insurance companies should be required to offer discounts to homeowners who have made necessary improvements.

  • Use hurricane sales tax windfalls to reduce rates – The sales tax windfalls can provide a source of funding for My Safe Florida Homes, for Citizens Property Insurance deficits, and for insurer defaults, such as Poe.

  • Improve the Public Model – Insurance company “black box” models have not worked and make scrutiny by regulators impossible.  The Public Model is a valuable tool, but it needs support and refinement.  The Insurance Consumer Advocate needs the authority to modify underlying assumptions to test the model.  The Public Model should be considered to set rates for Citizens Property Insurance.

  • Eliminate “cherry picking” – Governor Charlie Crist promised to end “cherry picking” by insurance companies.  As the governor has recommended, insurance companies that sell homeowners’ insurance in other states, but only sell auto insurance in Florida , should be required to offer homeowners’ insurance in Florida .

  • Eliminate Florida-only subsidiaries – These shell companies allow insurers to use complicated reinsurance schemes to funnel profits to parent companies, while shielding ratepayer funded reserves from claims.  This charade must end.

  • Independent Insurance Consumer Advocate – We think our current Insurance Consumer Advocate does a good job.  However, we believe the model of the Public Counsel Office, which has been highly effective on utility rates, would also work for the Insurance Consumer Advocate.  We question whether or not putting the Insurance Consumer Advocate under the Cabinet might create more opportunities for politics.

While the groups in this coalition and other consumer groups throughout the State of Florida have suggested many other ideas, these are the ideas that have the most support.


Teri Johnston, President of Fair Insurance Rates in Monroe (FIRM), said, “It is becoming impossible to live in Monroe County .  The Keys help drive the economy of the state. When we see the huge profits of the insurance companies, we question how these companies are regulated.”


The groups in the coalition expect other consumer groups to join their cause.  Jointly aligned are Homeowners for Affordable Coverage, Florida PIRG, Fair Insurance Rates in Monroe , Cyber Citizens For Justice, Inc., Florida Consumer Action Network, POA of The Villages, ACORN, Floridians in Action, Inc.and the Coalition of Florida Condominium Associations.


Bill Newton, executive director of Florida Consumer Action Network, said, “These high insurance company profits are outrageous.  Insurance company assertions that rates aren’t high enough are ridiculous.  Insurers believe they are entitled to make as much as Exxon,” said Newton .


Responding to insurance company proposals -- to increase state subsidies of insurance, to offer higher deductibles, and to offer “mortgage only” insurance coverage -- the consumer advocates cautioned that such measures transfer more of the risk of hurricanes to the taxpayers and away from the insurance companies.  The consumer advocates said that if the insurance companies’ proposed measurers were adopted, the state could end up in a Katrina situation where rebuilding did not take place because people were uninsured or underinsured.



"Having Affordable Coverage"

Ginny Stevans

[email protected]

Florida Consumer Action Network, Inc. (FCAN )

Bill Newton

[email protected]

Fair Insurance Rates in Monroe  (FIRM)

Teri Johnston

[email protected] 

Association of Community Organizations for Reform Now (ACORN)

Laura Goodhue

[email protected]

Cyber Citizens For Justice, Inc.  (CCFJ, Inc.)


Jan Bergemann

[email protected] 

Property Owners Association of The Villages (POA)


Joe Gorman

[email protected]

Floridians In Action (FIA)


Waldo Faura


Brad Ashwell

[email protected] 

Coalition Of  Florida Condominium Ass. (COFCA)

Dr. Bob Wolf

[email protected]