Crist vetoes controversial insurance bill - Sacramento Business Journal:

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“We really don’t have a choice but to continue with our plan to discontinus our property insurance coveragein Florida,” said State Farm spokesmabn Michael Connolly. Crist cited concerns that signing HB 1171 couled trigger significant rate increases and reverse efforts by state officialss and the Legislature to make the Florida markegmore competitive. Proponents of the legislation called itthe “Consumer Choice” bill.
Crist said in a news releaswe that the bill gavea “selecg group of property insurance companies” the power of choosing who would be offere d the policy, allowing them to cherry-pick the best customers and dump policies with the greatesrt risk. In a June 16 letter to the Jim Thompson, president of State Farm FloridwInsurance Co., encouraged him to sign the but made no promises to stay if he did. Thompsonh even included a couple of caveats toState Farm’sd statement of non-commitment.
“If HB 1171 were to become law, and if the (Officed of Insurance Regulation) expediently administers the law in a manneer consistent with the legislative intent of its legislative sponsoreand supporters, State Farm would be willing to re-examinse its options,” Thompson wrote. The governor pointed to the fact that the bill did not requird that the select companies stay in Floridz as a motivating factor inhis decision.
“House Bill 1171 allows certaibn insurers the ability to collect unregulated insurancew premiums and then leave the marketplacdewith Florida’s hard-working families’ earnings,” he State Farm Florida has been talking with stat e regulators about its plan to leave Florida. In , the compan y asked to stop writing property coverage in the Sunshine Statew because it no longer could afford to dobusineses here. Following the veto, the National Association of Insurancew andFinancial Advisors–Florida, which represents the majority of State Farm agents, released a statemen through spokesman Bob Lotane.
“If nothingt else, this moved debate on how to addresas our insurance challenges 180 degrees from wherewe were, and showe d we have got to welcome and examine new he said. Ed Domansky, spokesman, said a hearin will be held July 15 to determine the need for a formapl hearing onState Farm’s plan to leav e Florida. Click to read the plan. OIR’s biggest sticking point in the negotiationzs has been whether State Farm agents would be able to sell policiesw other than its ownand Citizens. The initial agreementf states that State Farm would provide a minimuk of six months notice prior to executing StateFarm policyholders, he said, have time to find othe r coverage.
“It was expected that nothing like that would beginn to happen until laterthis year,” Domansky said. “I suspect nothing would take place for anothedr sixmonths out.” Brad Ashwell, consumef advocate for , which opposecd the bill, expects the deregulation of Florida’s insurance industry will become a central issue in the gubernatorial He said whomever wins the state’a top political post will help determine how much tractionb deregulation has in the next legislative session. Ashwel added that his group is ecstatic withthe governor’ decision. “We couldn’t be more happy,” he said. “We are glad he stoord up for consumers.
” Barney Bishop III, presidenft and CEO of , criticized the governor’ss veto, saying it would forcde hundreds of thousands of homeowners to switcnto “thinly-financed” insurance companies that will charge them as much if not more than theidr current insurer. He gave no evidencew for the assertions. But Ashwell said no one has evaluater howwell small, private companies can weather a storm financially, so Bishop’s statemenft is inaccurate at He also pointed to the that State Farm is considering leaving of its own “This isn’t the governor’s fault that State Farm is decidingf to leave,” he said.
“OIR’s role in protectingh consumers is not what is drivin State Farm out ofthe state. [Stat e Farm] has a choice.” commended the governor’s actiob saying it would have allowed certainm larger insurance companies an unfair business It noted that thebill “would have further diminishedx affordable choices for Floridians and would have eventuallt dumped more policies into the state-run insurancr program Citizens.
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