Crist backs insurance reform plans

Article Courtesy of The Tallahassee Democrat

Published  January 13, 2007

TALLAHASSEE -- Gov. Charlie Crist is placing the power of his office behind parts of the insurance reforms House and Senate lawmakers have unveiled to rapidly lower hurricane insurance premiums to millions of homeowners.

Crist announced today in a press conference that he supported Senate plans to make Florida ratepayers the ultimate re-insurer for companies -- a move that could quickly cut rates by saving companies the cost of buying private catastrophic backup coverage.

In exchange for offering insurance companies cheaper catastrophic reinsurance, Crist said the proposal must require any savings be passed on to policyholders.

"We must mandate meaningful and broad-based rate relief for homeowners," Crist said. "The House and Senate are now holding the industry's feet to the fire."

He also blessed the idea of reforming the state-run Citizens Property Insurance, by rolling back recent rate hikes and allowing it to compete with the private market by offering competitive rates as well as other lines of coverage besides wind-damage insurance. He also said he supported the House idea to reshape Citizens by replacing its board.

Crist also seized on House efforts to incorporate his campaign pledge to stop national insurers from setting up Florida-only subsidiaries, and forcing auto insurers to also offer some form of property coverage if they do so elsewhere.

He said the state would probably need to go slowly in ending the use of subsidiaries so existing policies aren't dropped.

"We want to make sure that nobody loses the coverage they have with an existing company, so maybe a phase out is the best way to do it," Crist said.

One relatively new proposal Crist said he was supporting would police the profits that companies expect to make when they seek rate increases and requiring money be returned to consumers if those rates of profit are exceeded.

Even though he campaigned as a Ronald Reagan Republican, Crist said it was impossible for state government not to impose itself further into the middle of the private market.

"I am a less-government guy but I also understand the practical reality of where we are," Crist said. "We've had some dramatic couple of years that have put Floridians at risk, and we have an obligation to do everything we can to help them."

Virtually all of the ideas Crist discussed have been proposed already by lawmakers. And some of the more controversial ones for the industry -- eliminating Florida-only subsidiaries and "cherry picking" of profitable auto insurance -- have yet to actually materialize in legislation five days before lawmakers are set to convene a special insurance session.

Crist also wouldn't name one piece of either chamber's plans he disagreed with.

"I'm probably the happiest guy you're going to see around Florida today," he said.