Florida Insurance Commissioner Kevin McCarty sat down Thursday with The Palm Beach Post editorial board:

McCarty predicted State Farm will stay in Florida but will have a smaller presence. That could be good news for homeowners, who have seen premiums soar since Hurricane Andrew roiled the state’s insurance market in 1992.

“A leaner, smaller State Farm in Florida is better than no State Farm in Florida,” McCarty said.

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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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.

A water tower, a Florida City landmark, stands over the ruins of the Florida coastal community that was hit by the force of Hurricane Andrew. (AP Photo)

In a positive sign for the economy and Florida property owners, state financial officials said they could find twice as much money in the bond market to cover hurricane losses as they estimated six months ago.

“The picture is definitely better than it was,” said Ash Williams, head of the State Board of Administration, which manages Florida’s investments. “The bond market is loosening up a little bit.”

Williams said the state could expect to finance $8 billion in residential losses – up from an October estimate of $3 billion – and potentially cover losses if a Hurricane Andrew-type storm hits the state this year.

The announcement convinced Gov. Charlie Crist and the Florida Cabinet to abandon plans for extra financing for the state Hurricane Catastrophe Fund. Last year, Crist and the Cabinet paid Warren Buffett’s company, Berkshire Hathaway, $224 million in return for a promise of up to $4 billion in potential loans.

The state is still seeking a federal line of credit in case credit markets dry up after a storm.

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Gov. Charlie Crist shakes hands this morning with panelists of a kids-only town hall meeting. Students from around the state gathered in Tallahassee to voice their opinions and ask questions about state government. (AP)

UPDATE: Senate President Jeff Atwater sent word through his spokeswoman that “20 percent is too much.”

Gov. Charlie Crist said the main property insurance bill in the legislature had little chance of passing, calling the proposed 20 percent cap for increases to individual Citizens policy holders “excessive” and questioning whether the measure would get past Senate President Jeff Atwater, R-North Palm Beach.

“As I’m sure you know, Atwater was one of the strongest leaders in giving us the opportunity to strengthen Citizens,” Crist said. “So I don’t know if that’s going to go very far.”

The proposal is expected to contain several changes, including one that would use the state pension fund to loan $2 billion to the Florida Hurricane Catastrophe Fund in the event of a major storm.

Crist said he wasn’t wild about that one, either.

“Getting some backup from the federal government, I think, is a better way to go,” Crist said. “I think it’s very doable.”

Last year, Crist and the Cabinet paid Warren Buffett’s Berkshire Hathaway $224 million for a promise to loan the state $4 billion if a major storm hit the state. This year, Crist and the Cabinet are appealing to the federal government. More on that attempt here.

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Florida Insurance Consumer Advocate Sean Michael Shaw told The Palm Beach Post that lawmakers should let Citizens premiums increase by as much as needed to make the state-run insurer financially sound.

“Whatever the number is that Citizens needs to be at to be actuarially sound, that’s what I advocate,” Shaw said. (Listen here.)

A Citizens task force said that number could be as much as 30 percent statewide. CFO Alex Sink said making Citizens “actuarially sound” could mean a 60 percent jump for some homeowners along the coast, but that lawmakers should aim for less.

“We’ve got to start somewhere,” she said. “We can’t bite off the whole apple, but we’ve got to start beginning to take little bites to get Citizens more on a sound financial footing.”

With lawmakers ready to let a three-year rate freeze expire, Shaw said that he wasn’t asking legislators to cap that increase at a specific number.

He said he didn’t want anyone’s premium to increase, but that a Citizens hike was a “good thing” for homeowners with private insurance policies who are subsidizing those with policies from the state-run insurer.

The Citizens Mission Review Task Force has suggested capping increases at statewide average of 10 percent.

Walter Baker poses in front of his Lake Worth home, in which he has lived since 1998. 'I was paying $1,370 per year,' he says of his windstorm insurance. 'Now Citizens wants to charge me over $3,000 It is ridiculous.' (Bruce R. Bennett/Palm Beach Post)

Thanks to a rate freeze that took effect in 2006 and lasts through this year, Citizens policyholders have enjoyed a respite from big jumps in their bills. But homeowners like Baker are seeing premiums soar anyway as the insured value of their property is reassessed.

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“This is in no way a way around the rate freeze,” said Citizens spokesman John Kuczwanski. “It is an effort for us to collect premiums on the actual risk we insure.”

More here.

Former state Rep. Don Brown, R-Defuniak Springs, says in a letter in today’s Palm Beach Post that State Farm pulling out of Florida is a sign that that Gov. Charlie Crist’s property insurance plans are “unraveling.”

Those who know the world of finance say that State Farm has the money to pay claims, at least for now. But having been denied a much-needed rate increase, State Farm can’t guarantee that will be the case much longer.

So, going into this hurricane season, are you betting on the governor or State Farm to be able to bring cash to the disaster? If you’re betting on the governor, good luck. You may need a lot of it.

Meanwhile, the editorial board says Crist and the Cabinet made the argument for a national catastrophe fund last week in deciding to push for a federal line of credit to backstop the state’s hurricane catastrophe fund.

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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It’s been nearly two years since the state approved a rate increase for private property insurance companies and Gov. Charlie Crist doesn’t expect that to change after the state Insurance Regulation Office weighs information from its meeting today with State Farm.

During a press conference before the rate hearing, Crist re-affirmed his satisfaction for Florida Insurance Commissioner Kevin McCarty and then confidently predicted OIR’s final decision on the State Farm request.

“I think he’ll handle this case appropriately and I think you know what I mean by that” Crist said.

He quickly clarified for those who might not know what he’s talking about. “Rejecting it — the requested increase.”

Gov. Charlie Crist and CFO Alex Sink approved another two years of assessments on property owners to help pay for the more than 7,000 new claims from a 2005 storm. Read about that here.

But also check out this back-and-forth between Crist and Jack Nicholson, the head of the Florida Hurricane Catastrophe Fund, that took place before the vote.

It’s another example of how property insurance issues get Crist’s motor going. This time, the governor seems to take out his frustration on Nicholson, who he interrupted at least 10 times in about three-and-a-half minutes.

“I think I’m becoming suspicious,” Crist says at one point.

First off, sounds like the deal almost didn’t get done on Tuesday when an offer from the Senate included the name of Democratic Leader Steve Geller.

For days, House Republicans had been negotiating with Sen. Jeff Atwater.

So when they saw Geller’s name atop an offer Tuesday afternoon, some viewed that as a hardball tactic from Atwater.

(Think the time House Appropriations Chairman Bruce Kyle, left, photocopied a particular finger and sent it to the Senate as a budget offer from the House.)

Looking back, it sounds like Atwater was only trying to be inclusive. After all, Geller helped write the bill after the two led hearings that featured insurance executives answering questions under oath.

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Looks like House and Senate Republicans have found a compromise on the year’s most significant property insurance changes.

Here’s the bill the House will debate tonight and here’s the summary.

The main insurance bill of the year is up on the House agenda and, in the words of Rep. Dennis Ross: “I don’t see it coming up tonight.”

Ross said “things blew up” today with the Senate, putting the outcome of the session’s most significant property insurance changes in question with three days left in the session. He said it would “cause a riot” in the House if the measure was debated tonight, the deadline to debate bills on “second reading” without an extraordinary vote.

Sen. Jeff Atwater said he was “optimistic” about his bill, but he refused to budge from the “consumer protections” in his proposal.

“That was the goal when we started,” Atwater said. “And that’s the goal for the finish line.”

Read more here.

Sen. Mike Fasano called insurance companies’ treatment of Florida homeowners “disgusting” on the Senate floor Wednesday morning.

But he couldn’t get his fellow lawmakers’ stomachs to feel quite as upset as his.

Fasano proposed an amendment to an insurance-reform bill that would have required insurers writing car insurance policies to also write property insurance policies.

“They’re canceling the property-insurance policies that people have paid premiums to for 20 and 30 years,” the New Port Richey Republican said. “This amendment says you can no longer cherry-pick in this state.”

“What the insurance industry is doing to our state is disgusting,” he railed.

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“Boy, if you ever want to see a South Florida conspiracy this is one,” Sen. Al Lawson today said of an insurance bill from Sens. Atwater, Geller and Fasano, above left to right.

“They’re all in bed together. You can’t tell them apart if they were in a bed. They all look like twins.”

Lawson, right, the designated Senate Democratic leader next year, tried to keep the state-run insurer from covering $1 million homes and said “no matter what these members come together and tell you … you’re not going to save money.”

More here.

The gloves are off early in a Palm Beach County race for state Senate that promises to feature a fight between onetime allies.

Sen. Jeff Atwater, R-North Palm Beach, has released two campaign ads this year that blast property insurance companies and hone his image as an industry reformer who can deliver lower rates back home.

Now it appears that insurers will strike back against the Senate president designee. Records show that an insurance industry lobbyist may have provided footage in a Florida Democratic Party video last week that paints Atwater’s tough stance against insurers as hypocritical.

“Desperate people will do desperate things,” Atwater said.

The video also could be latest indication of the struggle for property insurers to keep their free-market ideals at home in the Republican Party of Florida.

Read the rest of the story here.

Sen. Jeff Atwater aired his second television ad of the year this week. This 30-second spot follows up on the first, which hit airwaves before the session and promised viewers that Atwater would take a tough stance against property insurance companies.

In the new spot, Atwater is shown scowling at insurance executives and chastising them for failing to recognize the “suffering” of their customers. It was dropped on district airwaves Tuesday, the same day Florida Democrats released a web video that tried to portray the North Palm Beach Republican as a tool of the insurance industry.

For the script of the commercial…

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The Senate Banking and Insurance Committee this morning approved a bill that would extend a cap on premiums for homeowners insured by the state-run Citizens Property Insurance Corp.

Minutes later, they approved another bill that could result in an increase for everyone else.

A conflict?

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After nearly 24 hours of testimony from insurance executives last month about why premiums haven’t dropped, state Sens. Jeff Atwater, R-North Palm Beach, and Steve Geller, D-Cooper City, released a list of proposals this morning they’d like to see their chamber consider this session.

Among the changes: Require companies to use hurricane projections approved by the state; establish standard allowable expenses insurers can charge to cover re-insurance costs; and increase the fines for companies that violate the insurance code.

See all the proposed changes here. Here’s a copy of the memo to Senate President Ken Pruitt here.