Unsuccessful in attempts to scuttle property insurance changes pushed by the industry, the states trial lawyer organization is turning its attention to a potentially more sympathetic target: Gov. Charlie Crist.
The Florida Justice Association is asking the governor to veto SB 2044, an industry-backed property insurance package that, among other things, makes it easier for companies to raise rates and requires policyholders to prove they are replacing the items that have been destroyed.
Lawyers are calling on Crist to veto the legislation because, they say, it gives already profitable companies the ability to scale back coverage on policies already in force.
Backers of the measure, a coalition of business groups and insurance carriers, say the bill is needed to bolster competition in the private insurance market, relieving the state of some of the burden of insuring properties.
Crist has not indicated which way he will go on the bill, but the governor has a history of skepticism toward insurers and their claims that they are not making enough money to justify expanding coverage in such a hurricane-prone state.
Last year, Crist vetoed an effort that would allow the states largest private insurers to raise rates without the need for approval by the Office of Insurance Regulation. A similar measure failed to pass in the 2010 Legislature as sponsors backed off in the face of a likely second veto by the governor.
The measure now before the governor would, among other things, allow insurers to raise rates up to 10 percent a year to take into account inflation and rising reinsurance costs while allowing insurers to withhold a portion of claims payments until repairs are made. That could put consumers on the hook for up front payments for some big fixes after a storm.
"This bill is destructive to Florida consumers," said Florida Justice Association President Michael Haggard. "Profitable insurance companies should not be able to rewrite current law to benefit themselves at the expense of Florida's homeowners.
Supporters of the bill including Florida Insurance Commissioner Kevin McCarty point to other provisions in the bill that will require new companies to be more financially sound.
Backers also point to provisions seeking to curtail some of the activities of public claims adjusters, who have been blamed for reopening frivolous claims up to five years after the event.
Supporters of the legislation also point out that a veto would mean a return to the use and file system in which companies can raise rates first and then seek state approval. That system was replaced after the 2005 hurricane season with a system in which companies must first apply for rate hikes before passing them on to consumers. That provision will go away if the bill does not pass.
I hope the governor will take into account the letter sent to him by his appointed insurance commissioner in support of the bill, said Sen. Garrett Richter, R-Naples and Senate sponsor of the bill.
Crist has until June 1 to act on the measure. If he does not, it becomes law.
