Florida House approves home insurance deregulation bill
> Posted by Julie Patel on April 22, 2009 10:42 AM
A measure that would roll back rate regulation for home and condo insurance was approved today by the Florida House of Representatives by a landslide vote of 105 to 13.
Rep. Bill Proctor, St. Augustine, said his bill aims to lure private insurers to the state and allow people to choose if they want to pay more for a minimally regulated policy from an insurer they trust.
State regulators would still be able to reject rates offered under the bill if they're illegally calculated or if they're not high enough.
"Let's treat our constituents like adults and allow them to choose the carrier they prefer," said Rep. Peter Nehr, R-Tarpon Springs. Insurers offering the policy must have at least $500 million in reserves or $200 million in reserves and a ratio of net premiums to surplus of 2 to 1 or lower.
Opponents -- including House Democratic Leader Franklin Sands -- say insurers could take advantage of the bill by charging as much as they want.
"There's nothing in this bill that prevents a company from charging rates that are much higher than actuarially sound rates," said Sands, D-Weston. "Each company has a mission of maximizing their profit. My concern is this could possibly lead to price gouging."
The full House and Senate would have to approve the bill in order for Gov. Charlie Crist to consider signing it into law. The Senate version of the bill is stuck in a committee that would have to approve or withdraw the bill for the idea to move forward. Crist has said recently that he supports free market approaches, but still thinks the state needs to regulate insurers.
The House and Senate will debate their versions of broad property insurance measure tomorrow that, among other things, would increase Citizens Property Insurance Corp. policyholder premiums by up to 10 percent annually and extend and shrink a $12 billion portion of the Florida Hurricane Catastrophe Fund.
