A move by Florida Gov. Charlie Crist to stop deregulation of property-casualty insurance could encourage other companies to leave the state, according to a public policy group.
Crist vetoed HB 1171, which would have let the some of Florida’s biggest insurance companies set their own rates without the oversight of the state’s Office of Insurance Regulation, who opposed the bill, according to media reports. The measure was supported by 85% of state lawmakers.
In January, State Farm Florida, the state’s largest property-casualty insurer, announced its intent to discontinue coverage in the state, citing a “substantially weakened financial position” directly related to its inability to obtain regulatory approval for what it felt was adequate rates.
State Farm will continue its plan to exit the state, for it has “little choice,” warned Eli Lehrer, director of the Center for Risk, Regulation and Markets at the Competitive Enterprise Institute, a non-profit dedicated to free enterprise and limited government, in a statement.
“I’d wouldn’t be surprised at all if other insurers follow,” Lehrer said. “I can’t see why any insurer of any size will want to do any business in Florida.”
Shortly after the bill passed the Florida House and Senate, Jim Thompson, president of State Farm Florida, called the legislation “a reflection of the need to reform and improve Florida’s property insurance market” and “a positive step for Florida residents who expect and deserve their insurer to be there following a major disaster.”
In a letter explaining his decision, Crist cited concerns about Floridians being faced with higher insurance costs in challenging economic times,
according to the Miami Herald.
Small Florida-based companies opposed the bill because only larger, national insurance companies would have been allowed to offer a new insurance policy with deregulated rates, under surplus requirements in the proposed law.
“Charlie Crist has declared war on Florida homeowners,” Lehrer said. “He is taking away choices, taking away the market, and taking away freedom. He is working against Floridians’ interests.”