Citizens rate freeze passes
Saturday, May 05, 2007
By Kristin E. Swartz
Palm Beach Post Staff Writer
Tallahassee-As its last act before wrapping up the 2007 legislative session, the Florida Legislature approved Gov. Charlie Crist’s proposal to strengthen Citizens Property Insurance Corp. and sent the bill to him to sign.
“It has been our goal to make affordable property insurance to all Floridians,” said state Rep. Julio Robaina, R-Miami.
The bill freezes rates through 2009 and lets people buy coverage from Citizens if a competitor’s rates are 15 percent higher.
Opponents of the rate freeze, who include Chief Financial Officer Alex Sink, say that putting off the rate increases means the state-run insurer may not have enough money to cover claims if Florida gets hit with a major hurricane.
“This rate freeze is like playing Russian roulette and every year you have that rate freeze, you are adding another bullet to the cylinder,” said Rep. Alan Hays, R-Umatilla.
The house passes the bill 106-10 at 3:30 p.m. and sent it to the Senate 15 minutes later. It quickly approved the bill, which Senate President Ken Pruitt, R-Port St. Lucie, said would be the last thing the chamber would do during the regular session
Crist applauded the move.
“You put the nail in the coffin today on the insurance industry that’s hurting the people,” he said, addressing a crowded Capitol Rotunda. “We don’t work for them, we work for the people.”
He added: “I thought I heard some groans from insurance lobbyists. Tough.”
The hourlong House debate reverted to the question of whether Florida needs to be in the insurance business in the first place, with several representatives using references to its being a “socialistic” policy.
“Government needs to keep its nose out of insurance,” said Rep. Frank Attkisson, R-Kissimmee. “There are much better ways to solve insurance than have to set up some socialistic systems.”
As with most major issues, the bill had largely been worked out between leaders of both chambers by the time it came to the House floor. But then came a proposal from Rep. Dennis Ross, R-Lakeland, that would have exempted consumers who are covered by private insurers from having to pay assessments to bail out the state-run company.”
“They are at risk of an assessment for a company that has the unfair competitive advantage of selling insurance at any rate they want to,” Ross said. “This is as close to a socialist policy as we’ve ever come to. Rate freezes don’t work, price fixing doesn’t work.”
The amendment died.
The Senate wouldn’t have passed the bill if it had that measure in it, Sen. Jeff Atwater, R-North Palm Beach, said.
“No way,” he said. “If the risk is going to be dumped back only on their shoulders, you’re hoodwinking the risk.”
But Rep. Ron Reagan, R-Sarasota, said the state doesn’t have the competitive markets that would make the legislature’s solution work.
“We understand that the fourth-largest insurer in the nation belongs to us know,” he said.
