Florida Insurance Commissioner Kevin McCarty Comments on Proposed Property Insurance Deregulation Legislation, SB 2036


FOR IMMEDIATE RELEASE                         
April 27, 2009                         

Contact:     Ed Domansky                 


      [email protected]


TALLAHASSEE, Fla. – “I previously have stated that the OIR recognizes the importance of competition in Florida’s property insurance marketplace, but I am concerned that SB 2036 (and HB 1171) will have several negative consequences, which thus far have been overlooked; and I feel it is important that the Legislature be informed of my concerns before this bill is heard on the floor of the Senate.

“The competition that is being promoted in this legislation, by allowing large national insurers to write homeowners policies that are unregulated for excessiveness, will very likely yield substantial and unpredictable rate increases. I can assure you that the companies who seek to take advantage of the proposal are not going to reduce their rates if this bill passes. They will almost assuredly increase the rates they charge in Florida.


“In addition, there is no guarantee that these companies will continue to write in Florida, even if this bill passes. Not a single company has indicated to me a willingness to either stay in Florida or write new business if this proposal is adopted.


“In fact, in 2002, the former Department of Insurance allowed a large national insurer to write condominium insurance at an unregulated rate. The results were not beneficial for Floridians.  This company massively increased rates over the next several years and shortly thereafter canceled every policy in the state. There is no reason to believe that this proposal will result in anything different.


“I also am concerned that this proposal will have unintended negative consequences on the competitive opportunities for our current domestic insurers – something that the Legislature and the Office of Insurance Regulation have worked very hard to cultivate.


“The House and Senate invested $250 million in Florida companies who are writing new business in our state. That program has been extremely successful, and has helped attract more than 40 new property insurance writers to Florida, with more than $4 billion in new capital. The proposals in SB 2036 (and HB 1171) threaten to disrupt this progress.”

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