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Negron doesn’t buy insurers ‘apocalypse’ claims, meaning tax break may be doomed

Thursday, March 28th, 2013 by John Kennedy

When Senate budget chief Joe Negron rolled out a plan last week to eliminate a longtime tax break for the insurance industry and use the savings to reduce motorist fees, insurers were caught by surprise.

By Thursday, the industry had reloaded — with insurance lobbyists lining up to plead with Negron’s Appropriations Committee to drop the plan. Several raised the possbility of insurers choosing to locate offices outside of Florida, if the incentive is lost.

In the end, the bill (SPB 7132) sailed 19-0.

Insurance representatives told senators that companies had created 44,000 jobs in Florida since 2008 — even while the state was rocked by high unemployment. They also boasted that insurers were financially strong and paid claims on time.

“But the repeal of this will have an impact,” said Paul Sanford, lobbyist for the Florida Insurance Council.

Negron wants to repeal a tax incentive on the books since 1987, which gives insurers a credit on the insurance premium tax for 15 percent of the salaries paid employees in Florida. Negron said $220 million earned through the repeal would be used to reduce motorist fees boosted in 2009 when lawmakers were scrambling to patch budget holes.

The increases were part of a $2.2 billion package of tax and fee hikes that included an increase in the state’s cigarette tax.

Negron said industry statements about the strength of the industry help make his case that the tax break is no longer needed.

“For every person who is paying less in taxes, someone is paying more,” Negron said, adding, “State Farm in 2012 had a net income of $3.2 billion. The CEO had a good year, which he deserved….he made $9.6 million. Allstate had $2.3 billion in net income for 2012. I’m happy about that. That’s a good thing. That means they’re solvent and they’ll pay claims.

“But this idea that if we decide to redeploy a tax incentive to our constituents that the apocalypse is going to occur, I don’t think the facts support that,” he concluded.

 

House ‘opts in’ to Citizens surplus lines, killing bill

Tuesday, March 6th, 2012 by Dara Kam

The House sponsor of a bill aimed at reducing the number of homeowners covered by Citizens Property Insurance opted to kill the measure (HB 245) rather than allow the state-run insurers’ customers to “opt in” to switching to unregulated “surplus lines” carriers.

Consumer advocates cheered the apparent death Tuesday of what they called the backdoor deregulation of Florida’s property insurance market.

A bipartisan House coalition voted 63-52 in support of the Senate’s language requiring that Citizens insurance customers have a chance to sign off first before being moved to the “surplus lines” companies with unregulated rates.

The House refusal to strip the Senate’s “opt in” provision inserted a day earlier proved to be a deal-breaker for the bill’s sponsor, who said this year’s effort appears finished. Industry lobbyists preferred a system where customers of the state’s insurer of last resort would be automatically switched unless they took steps to “opt out.”

“We’re finished with it for this year,” sponsor Rep. Jim Boyd, R-Bradenton, said Tuesday.

- Palm Beach Post staff writer Charles Elmore contributed to this story.

Scott demands plan for shrinking Citizens Insurance

Tuesday, November 1st, 2011 by John Kennedy

Calls for revamping Citizens Property Insurance Corp., the state-run carrier for those who can’t find private coverage, has been a rite of spring in Tallahassee for years.

But Gov. Rick Scott on Tuesday is looking to accelerate that discussion — even as he still looks intent on finding a private company willing to take over Citizens, which now has 1.4 million policies statewide.

About half the homeowners’ policies in Florida are held by Citizens, which also is dealing with what actuaries say is 70 percent of the risk.  Coastal homes and condos, which face a high hurricane threat, form the bulk of the company’s line.

Meanwhile, Citizens is adding 4,000 to 5,00o policies a week — with private carriers continuing to cold-shoulder high-risk Florida homeowners, officials said.

“This is not something we can continue to do,” Scott told the Cabinet on Tuesday.

Scott wants the Citizens governing board to meet later this month and present a blueprint for Citizens’ future Dec. 6 to him and the Cabinet. The goal, he said, is simple:” “to shrink exposure.”

Industry cheers Scott’s signature of property insurance overhaul bill

Tuesday, May 17th, 2011 by Dara Kam

Gov. Rick Scott signed into law today a sweeping property insurance measure (SB 408) hailed by the insurance industry but denounced by consumer groups.

Critics say the new law, which goes into effect immediately, will allow insurance companies to raise rates up to 15 percent and make it harder for Floridians to collect on claims. Proponents contend the law will draw new insurers to the state and increase competition.

“A healthy, stable and competitive private insurance market is critical to the success of Florida, given the hazards we face,” Scott, whose staff helped craft the bill, said in a statement. “I commend the Florida Legislature, especially Senator Richter and Representative Wood, for bringing this important legislation forward.”

The new law undoes many of the changes approved by lawmakers and Gov. Charlie Crist in the wake of the catastrophic 2004 and 2005 hurricane seasons.

Among other things, the new law:

- Shrinks from five years to three years the time homeowners have to file claims for hurricane damages;
- Lets insurers make homeowners to pay for repairs before getting reimbursed;
- Permit insurers to raise policyholders’ rates without prior approval from regulators;

Scott’s signature prompted a flurry of accolades from the insurance industry and business groups and a dour statement from Sen. Mike Fasano, who urged Scott to veto the measure.

“For an administration which vowed not to support new taxes or fees, this bill virtually guarantees a 15% premium ‘reinsurance’ increase for Florida policy holders. This is a backdoor tax and fee increase that will hurt most homeowners with a mortgage, consumers and small business owners at a time with very high foreclosure and unemployment rates, all during a fragile economic recovery,” Fasano, R-New Port Richey, said in a statement.

But supporters insist the new law will open up Florida’s insurance market.

“Despite what the critics say, signing this bill into law is the first step toward stabilizing Florida’s property insurance market. It will increase competition by attracting insurance companies that currently do not write property insurance policies in Florida,” said Mark Wilson, president Florida Chamber of Commerce.

Read some of the other blurbs after the jump.

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Crist tells CNBC Florida population decline “not that big a deal”

Thursday, September 3rd, 2009 by Dara Kam

Gov. Charlie Crist performed as the Sunshine State’s chief pitch-man, blowing off Florida’s historic population loss and touting the fine weather in a CNBC interview this morning.

Florida saw a drop of 58,000 residents last year, the first population decrease since military residents left the state after World War II.

“It’s not that big a deal, to be honest with you,” Crist shrugged off the decline on CNBC’s “Squawk Box” show today.

The governor then launched into a Sunshine State sales pitch, touting declines in property taxes and property insurance rates and the weather.

“And it’s Florida. It’s a beautiful place. It’s a gorgeous day today down here in South Florida. You just can’t beat the Sunshine State,” said Crist, who is in Miami. Florida I really think is on the rise and it’s a great deal for an awful lot of people, too.”



Although Florida’s unemployment rate is nearly 11 percent, Crist was upbeat about the job market and pointed to Palm Beach County as a shining example.

Palm Beach County’s unemployment rate was 11.7 percent in July, one percentage point above the state average.

“Even in the Palm Beach County area where Scripps and Torrey Pines and some of these other scientific institutes have located, Max Planck…it’s been great for that area of the state,” Crist said. “We’re very pleased with the direction things are going. We wish they were better, don’t misunderstand me. But we’re not sitting still. We’re on the move. And I continue to be optimistic and encouraged about where we’re going.”

Crist, who drew the wrath of fellow Republicans by urging Congress to pass President Barack Obama’s economic stimulus plan, reversed that position on the health care reforms now being considered in Washington.

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Crist likely to veto insurance bill

Wednesday, June 3rd, 2009 by Dara Kam

Gov. Charlie Crist said today he will likely veto an insurance deregulation bill that consumer advocates charge will lead to rate increases.

Crist said he will probably not sign HB 1171 that would give carte blanche to insurers with more than $200 million in surplus to raise rates.

“The odds are not. But I haven’t made a final decision,” he said.

Department of Insurance Regulation chief Kevin McCarty urged Crist to veto the bill in a letter sent last month and last week saying that it would unfairly benefit large insurers and destabilize the insurance market.

It would also give a leg up to State Farm, the insurer that is canceling its Florida homeowners policies because McCarty rejected its rate increase requests, McCarty said.

State Farm was overexposed in Florida and would likely have canceled the policies regardless of how much they were allowed to charge, McCarty said.

“In fact, State Farm and other companies may actually use excessive rates to effectively non-renew policyholders under the ruse of consumer choice,” McCarty wrote.

Senate prez gets earful from State Farm agent

Wednesday, March 11th, 2009 by Dara Kam

Senate President Jeff Atwater got an earful from a combative State Farm agent at what was supposed to be a routine Q and A with T-Coast leaders.

State Farm agent Bill Knight peppered Atwater, who has been on the warpath against property insurers for what he believes are excessive rates, with questions about the state CAT fund and other insurance questions, often interrupting the president and ultimately shutting down the session.

State Farm recently announced it was leaving the state and canceling its 1.2 million clients over the next two years after state insurance officials turned down its request for a 47 percent rate hike.

The state’s catastrophe fund has about $8 billion in cash on hand, but needs to cover about $28 billion in losses if a major storm occurs.

“We are heading out and there’s no turning around at this point. Where are the dollars going to come from if we were to have a Category 4 or 5 storm hitting Tampa or Pinellas County or anyone else in the state?” Knight wanted to know.

“We would be in a world of hurt if this occurred,” Atwater, R-North Palm Beach, said.

But that didn’t stop Knight.

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Crist to Allstate agents: Too bad

Thursday, January 17th, 2008 by Dara Kam

Gov. Charlie Crist reiterated his advice to Floridians to shun Allstate Insurance companies and showed little empathy this morning for companies’ 1,200 agents and salesmen in the state whose income will be impacted by insurance regulators suspension of Allstate’s ability to write new auto insurance policies.

“It’s too bad they work for such a bad company,” he said when asked about the employees’ future.

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Senate orders insurance execs to testify

Tuesday, January 15th, 2008 by Dara Kam

A Senate select committee issued letters to five insurance industry executives on Tuesday ordering them to appear under oath next month to answer questions about property insurance rate filings.

The letters were sent to execs of Hartford Insurance Co., American Strategic Insurance Co., Nationwide Insurance Co. of Florida, Florida Farm Bureau insurance companies and two Allstate Insurance Co. Florida subsidiaries.

The letters were sent within hours after Office of Insurance Regulation Commissioner Kevin McCarty halted a scheduled two-day hearing after just three hours of testimony from Allstate executives, calling the company’s representatives refusal to hand over documents regarding its rate filings “a slap in the face” to regulators.

“We recognize that your schedule is busy and that you may not be able to be present for the full two days of hearings. Thus, when you contact the Senate to confirm your appearance and discuss your schedule, we will provide an approximate time range for your particular testimony before the Committee. However, it is our expectation that, in addition to your testimony, a senior member of your management team will attend the full two days of meetings in order to hear all of the testimony and answer additional questions Senators may have for your company after others testify,” the letters, sent by Select Committee on Property Insurance Accountability co-chairmen Jeff Atwater, R-North Palm Beach, and Steve Geller, D-Cooper City.

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Crist to sue property insurers

Tuesday, December 18th, 2007 by Dara Kam

Gov. Charlie Crist has asked three trial lawyers to sue some property insurers doing business in Florida, possibly with a class-action lawsuit, because he believes they are in violation of new laws passed by the legislature nearly a year ago.

Crist said today he has asked Dexter Douglass, Robert Hackleman and Roberto “Bobby” Martinez to figure out a way to sue property insurance companies. The lawyers have agreed to do the work for free, Crist said.

Crist said he wants the trio, who will work with Crist’s general counsel Paul Huck, to sue the property insurers and get homeowners refunds on what he believes were overpayments on premiums.

“I think they’ve been ripped off. I think these companies, I know, they have been greedy. I believe they have been unfair. I think the only way we can get some recourse and some justice on behalf of the people I serve is to take them to court,” Crist said.

Douglass, a Democrat, previously served as the late Gov. Lawton Chiles’ general counsel and was one of a cadre of attorneys involved in a successful class-action lawsuit against the tobacco industry.

Martinez is a member of the Florida Board of Education and was chair of Crist’s transition team, on which Hackleman also served.

Insurers feel the heat of global warming

Thursday, September 27th, 2007 by Dara Kam

Chief Financial Officer Alex Sink co-authored a Washington Post op-ed piece today outlining global warming’s effect on the insurance industry.

alex%20sink.jpg

With Montana state auditor John Morrison, Sink cautioned federal lawmakers to do something to address climate change because it is threatening the industry’s survival.

“Insurance as we know it is threatened by a perfect storm of rising weather losses, rising global temperatures and more Americans living in harm’s way,” the op-ed quotes Andrew Logan, insurance director of the Ceres Investor coalition that represents $4 trillion in market capital.

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Crist: I won’t back down

Tuesday, August 14th, 2007 by Dara Kam

Although he is an avid angler, Gov. Charlie Crist said he and Office of Insurance Regulation Commissioner Kevin McCarty are not on a fishing expedition to snag insurers, as some industry representatives have charged.

McCarty was right to postpone a State Farm rate hike hearing, previously scheduled for today, because industry insiders were not forthcoming in their responses to McCarty’s subpoenas, Crist said.

“The commissioner’s opportunity with the subpoena power will give him a greater chance to have some straight answers about what the industry is doing with the huge profits that they’re making,” Crist said.

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