Senate committee gets update on insurance premiums

Monday, January 28, 2008

Anika Myers Palm
Sentinel staff writer

January 23, 2008

Insurance was the subject of the day in Tallahassee as the Senate Select Committee on Property Insurance Accountability heard from Florida Insurance Commissioner Kevin McCarty and an actuary about why property-insurance rates in the state haven’t fallen.

McCarty and Robert Hunter, an actuary and insurance director for the Consumer Federation of America, testified Tuesday afternoon about what regulators had seen and heard from officials since the implementation of new requirements for insurers in January 2007.

They said some companies hadn’t met regulators’ requirements, but hesitated to say that companies that had not lowered their rates or filed appropriate paperwork with the state had violated state law.

“I’m reluctant to say [that],” said McCarty, who admitted to being “deeply troubled” and “surprised” by some of the rate filings the Office of Insurance Regulation has received and some of the answers he has heard from insurers in rate hearings.

At a Tuesday news conference about biofuel research, Gov. Charlie Crist also signaled his dismay in comments about Allstate, which had its authority to write new insurance in the state suspended and then reinstated late last week.

“They’ve snubbed their noses at the people of the state of Florida. . . . They’ve snubbed their noses at the administration in trying to enforce the new law, and now the judicial branch is being treated by this arrogant company in a fashion that I think is inappropriate and irresponsible,” said Crist. “So, yeah, I think there’s a lot we can do.”

State senators questioned Hunter and McCarty about insurance rates and promised to bring McCarty back for additional testimony.

“We will not rest; we will not be distracted from this effort . . . to bring relief to all Floridians,” said state Sen. Jeff Atwater, R-North Palm Beach.

The insurance industry had attempted to get in front of the testimony with a Tuesday morning news conference in Tallahassee to explain economic issues associated with property insurance in Florida.

Nancy Watkins, an actuary with Milliman Consultants who authored a 2007 report sponsored by insurance trade groups, said state regulators’ assumptions about the amount of savings insurers could expect from state reinsurance were overstated.

And Bob Hartwig, president of the Insurance Information Institute, emphasized that premiums in Florida must continue to be set based on past and anticipated losses from catastrophic storms in the state.

The Senate committee has asked executives from the Hartford Group, American Strategic Insurance, Nationwide, Florida Farm Bureau and Allstate insurance companies to testify about homeowners-insurance rates Feb. 4 and 5.

Aaron Deslatte of the Sentinel staff contributed to this report. Anika Myers Palm can be reached at 407-420-5022 or

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