Consumer advocates ask Gov. Crist to veto home insurance deregulation

as posted at weblogs.sun-sentinel.com
Posted by Julie Patel
May 6, 2009 03:17 PM

Four consumer advocacy groups implored Gov. Charlie Crist today to veto a bill that would allow large insurers to charge essentially unregulated rates. "This bill is an invitation for insurers to game the Florida regulatory system and abuse consumers," said officials from the Consumer Federation of America, Consumer Watchdog, Center for Economic Justice and United Policyholders in a letter to the governor. "No price can be too high, no discrimination can be found unfair if a policy is issued under these terms."

Bob Hunter, insurance director for the Federation who occasionally consults for state regulators, said deregulation failed in Texas where he was the insurance commissioner. Insurers wouldn't sell policies or they'd only sell policies "at very excessive rates," according to the letter.

Sen. Mike Bennett (R-Bradenton), who pitched the Senate version of the bill, told legislators last week to support the measure "if you really believe in the free market [and] you really believe constituents should be able to pick an insurance company of their choice even if they're willing to pay more."

Florida legislators, who received nearly $2 million in insurance-related contributions since the start of 2008, approved six home insurance measures that were backed by insurers this year and two that weren't. Included in the half dozen measures is the deregulation bill and a broad property insurance package aimed at drawing insurers to the state and reducing financial risks for Floridians if a major hurricane hits.

"Loosening the regulatory chokehold on private insurers and requiring the residual market to pay its own way are positive moves," Cecil Pearce, American Insurance Association's state affairs vice president, said in a statement.