State to take on top insurers over costs
Legislators may require executives to testify under oath to find out why rates did not fall significantly.
John Kennedy | Tallahassee Bureau Chief
Top insurance executives are being summoned — and may be subpoenaed — to testify under oath next month before a newly formed Senate select committee examining why last year’s legislative overhaul of homeowners’ insurance has not caused rates to plummet.
Requiring an oath before testifying is rare in Florida legislative committees and was last employed during another insurance battle almost five years ago over medical malpractice rates. Senators also made clear they want the top brass from America’s insurance industry to appear before the panel.
“We’re going to be looking for CEOs” to testify, said Senate Minority Leader Steve Geller, D-Cooper City. “We’re going to be looking for Mr. Farm from State Farm. From GEICO, we’re going to want the Gecko himself. . . . We want people in authority.”
The Select Committee on Property Insurance Accountability plans to hold hearings Feb. 4-5 at the state Capitol.
A central part of the insurance reform approved last January was the Legislature’s expansion of the state’s Hurricane Catastrophe fund from $16 billion to $28 billion — money that was supposed to provide insurers with the low-cost reinsurance companies said they needed to reduce rates.
Since then, Sen. Jeff Atwater, R-Palm Beach Gardens, said state records show that about 70 percent of the industry appears to be complying with the new law and offering reduced property-insurance rates.
The remaining 30 percent of the industry, which includes Allstate Insurance, Travelers Indemnity Co., First Floridian Auto and Home and the Hartford Financial Services Group, have submitted proposed rates that have been rejected by state regulators as too high.
Atwater said focusing on the firms that have refused to cut these tariffs may yield some answers.
“Why not the rest? That’s what these hearings will find out,” Atwater said.
Bill Stander, a vice president with the Property Casualty Insurers Association of America, said the industry thinks it has complied with Florida law and is willing to make its case for why some homeowners are still paying sky-high rates. But he acknowledged there is risk involved for the industry.
“If we can be assured that we’ll get a fair opportunity to tell our side of the story, then we’re willing to do that,” Stander said. “But if it turns into a public-relations stunt, which I hope it doesn’t, then I don’t think anybody wins.”