Gov. Crist: Insurance bill must lower rates

Gov. Charlie Crist is open to suggestions to revamp the state's troubled insurance industry as long as the ideas lead to substantial rate decreases.

Article Courtesy of The Miami Herald

Published  January 12, 2007

Floridians' property insurance rates must go down -- even if it means the state will have a greatly expanded role in providing the coverage, Gov. Charlie Crist said Thursday as he endorsed several ideas lawmakers are already working on to fix the state's insurance woes.

Crist didn't propose specific legislation, but he laid out broad goals for what he wants lawmakers to do when they meet in a special session next week.

''Any bill that reaches my desk must require a meaningful and broad-based rate reduction for homeowners,'' Crist said. ``And I believe it will, from what I've seen.''

Crist was speaking of a wide-ranging array of lawmaker proposals. They include extending more backup coverage to private insurers; required rate rollbacks for the state's largest insurer, Citizens Property Insurance; and prohibiting companies from selling some types of insurance but refusing to sell wind coverage. All the ideas Crist endorsed are already being considered by either the House, the Senate or both.

Crist also made it clear that he isn't trying too hard to find a way for insurance companies to come out of the session happy.

''We must prohibit excess profits by these companies,'' said Crist, a Republican taking on his first major challenge as governor. ``We must require them to return those excessive profits to the policy holders.''

He campaigned on bringing down premiums that have doubled or tripled after eight hurricanes affected Florida in 2004 and 2005. Rate decreases didn't accompany a quiet 2006 storm season, sparking widespread complaints from homeowners and businesses who are struggling to pay for coverage or find it.

Crist also said he wants to dramatically expand the role the state plays in insurance.

For one, Crist envisions making the state the ultimate underwriter of all risk above a certain catastrophic amount, an idea initially proposed by Senate Democrats. Under that proposal, which is being included in a bill the Senate is working on, state government would guarantee that it would pay claims in the event of a major storm, like a Hurricane Andrew or Katrina, that causes tens of billions of dollars in damage.

That should make companies more willing to sell policies here because they will know they won't be on the hook should there be a massive storm.

''The more we define the exposure, the more companies come back,'' said Sen. Dan Webster, R-Winter Park.

And companies wouldn't have to factor the prospect of a huge storm into premiums, backers of the idea say.

Crist also believes the state should take over more of a role from private insurers by expanding the role of Citizens, a company the state created to sell wind policies to people who can't find private coverage. It has grown to be the largest insurer in the state with more than 1.3 million policies.

Crist said the company should be able to cover things besides wind damage, thus building a broader premium base.

Crist also backs plans to automatically roll back one recent Citizens rate increase and delay another, keeping the company's rates at last year's levels.

Typically, Republicans have been loathe to endorse a broader role for government in providing services, generally saying that private companies almost always do a better job at everything.

But asked about whether Republicans were abandoning their principles, Webster said another conservative principle -- that private homeownership is a good thing -- is at risk if something isn't done to lower rates.