Florida House votes to slash regulation on home insurance rates In wake of State Farm, members want the market to act naturally

Florida House votes to slash regulation on home insurance rates == In wake of State Farm, members want the market to act naturally

By Brandon Larrabee
Story updated at 3:47 AM on Thursday, Apr. 23, 2009

TALLAHASSEE - The House overwhelmingly approved a bill freeing property insurance companies with large reserves from most state rate regulation, even as opponents worried that doing so would open the door to huge increases and price gouging.

Supporters said the bill, sponsored by Rep. Bill Proctor, R-St. Augustine, would allow the free market and consumer choice to govern rates instead of giving the control to government regulators. The measure sailed through on 105-13 vote.

"It's time for us as a Legislature to step up to the plate and do what's right and give our citizens the opportunity to choose," said Rep. Lake Ray, R-Jacksonville. "It's time for us to let the market move itself."

The bill is the first step in what could be a sweeping overhaul of the state's property insurance market. Spurred by State Farm Florida's decision to pull out of the market in Florida, concerns about the roles of state-backed Citizens Property Insurance Corp. and reports that a major storm could wipe out the Florida Hurricane Catastrophe Fund, lawmakers have moved to remake the landscape.

State Farm announced its decision shortly after the state Office of Insurance Regulation rejected a proposed increase that would have averaged 47 percent across the state.

"This bill today will invite private property insurance companies back into our state," said Rep. Jim Waldman, D-Coconut Creek. "Let's treat our constituents like adults and allow them to choose the insurance carrier that they prefer."

But other lawmakers worried that some consumers, particularly those who aren't financially savvy, could end up buying policies without understanding what they're getting into.

"My only concern is that this could possibly lead to price gouging for people who are uneducated or unable to compare policies," said House Minority Leader Franklin Sands, D-Weston.

Other opponents said the move would send a signal to insurance companies that they can intimidate the Legislature into changing its policies.

"The biggest concern that I have is that we're going to see what happened with State Farm happen all over the state," said Rep. Rick Kriseman, D-St. Petersburg.

The Senate, meanwhile, delayed debate on a measure that would allow Citizens to raise its insurance rates by an average of 10 percent statewide until rates are actuarially sound. That proposal also enjoys broad backing, with Gov. Charlie Crist reiterating his support Wednesday morning.

Senate Minority Leader Al Lawson, D-Tallahassee, said the combination of the two measures would allow a fairer comparison between rates charged by companies like State Farm and those charged by Citizens.

"The problem is, when it looks like State Farm is having a significant rate increase, it's really not compared to what Citizens needs to charge," Lawson said.

Senators are expected to instead consider the bill and several amendments today before giving it final approval Friday.

brandon.larrabee@morris.com,

(678) 977-3709