Which side are you on?

Hurray for Governor Crist!

Insurance Companies had it their way for too long. And they will keep having it unless you and me do something about it.

I have read some distressful news today and these are my thoughts:

As a realtor, I see every day the desperate situation of many homeowners.

It is a time of great distress in America. People are losing their homes, and losing their jobs.

But the aggressive greed of insurance companies (among others) is unlimited. Corporate profit, bonuses, monopoly games, you name it. This has become the standard.

Owning a home in Florida is more difficult now than it has ever been in the past few decades. Cities' greed, counties' greed, mortgage banks' greed. This undeniably is a substantial part of the problem.

Insurance companies are large entities dedicated to accumulate wealth at our expense, often to waste it on incredibly large bonuses on their directors (see AIG). How many real damaging hurricanes have we sustained in the last 20 years, and how much were their losses that can justify the rate increases? How much homeowner insurance rates have increased, compared to actuarial increase in these risks?

The uncompromising attitude of these companies contrast with everything their ads and publicity proclaim.

I totally agree with Governor Crist.

That how I got the news:

Read in the Sarasota Herald Tribune - April 14, 2010

Tussle in Tallahassee over insurance rates control

TALLAHASSEE - Call it Round 3 between the Legislature and Gov. Charlie Crist. Earlier in the session, Crist vetoed a campaign fundraising bill championed by top Republicans. This week, lawmakers and the governor are facing a showdown over a bill that would eliminate tenure for newly hired teachers and links future raises for teachers with student test scores. And now, another storm is building between the Republican Crist and the GOP-controlled Legislature. Legislation that would weaken the state's ability to control property insurance rates is moving through the Legislature. Crist again is threatening a veto.

The legislation is similar to a bill passed last year that would have largely freed major insurance companies from rate regulation for hurricane coverage -- but Crist vetoed that measure. Lawmakers have tempered the bill this year, partly in hopes of winning Crist's support. On Tuesday, the Senate General Government Appropriations Committee approved a bill (SB 876) that would allow property insurance companies to raise their rates an average of 10 percent a year without state approval. But that increase may still be too much for the governor.

Crist has voiced his opposition this spring to any legislation that increases property insurance rates, saying Floridians cannot afford it during a difficult economy. He said if he receives a bill that increases rates, "I will veto it and happily do so." It's another threat in a session that has been characterized by vetoes and anticipated vetoes. Crist has already said no to a bill that would have allowed lawmakers to create "leadership funds" with campaign contributions. Lawmakers say the rate legislation is necessary to revive Florida's property insurance market, arguing that giving companies more leeway in raising rates will attract more companies and spur competition.

Without more private competition, lawmakers say, the state will continue to rely heavily on Citizens Property Insurance, the government-backed insurer that covers more than a million Floridians. If Citizens runs into a deficit, it could result in a surcharge on all insurance policyholders in the state, auto insurance policies included. Sen. Mike Bennett, R-Bradenton, said the state's current regulatory structure has hurt the ability of Floridians to find coverage from private companies. "We've tried it their way for year after year after year and we have a market that is going down, down, down," said Bennett, who is sponsoring the Senate rate bill. Lawmakers have backed off their original plans for a more wide-open deregulation system for property insurers. And on Tuesday, they moved closer to the governor's position, dropping a plan that would have allowed a series of increases up to 15 percent a year and replacing it with the 10 +ercent limit. The House, which will take up a similar bill (HB 447) today in a policy council, is also expected to back a 10 percent limit. But the modified bill is opposed by the state Office of Insurance Regulation.

Monte Stevens, an OIR lobbyist, said state regulators believe the bill "still goes too far to the side of the companies."

If Citizens runs into a deficit, it could result in a surcharge on all insurance policyholders in the state, auto insurance policies included. Sen. Mike Bennett, R-Bradenton, said the state's current regulatory structure has hurt the ability of Floridians to find coverage from private companies. "We've tried it their way for year after year after year and we have a market that is going down, down, down," said Bennett, who is sponsoring the Senate rate bill. Lawmakers have backed off their original plans for a more wide-open deregulation system for property insurers. And on Tuesday, they moved closer to the governor's position, dropping a plan that would have allowed a series of increases up to 15 percent a year and replacing it with the 10 percent limit. The House, which will take up a similar bill (HB 447) today in a policy council, is also expected to back a 10 percent limit.

But the modified bill is opposed by the state Office of Insurance Regulation. Monte Stevens, an OIR lobbyist, said state regulators believe the bill "still goes too far to the side of the companies." Stevens also said regulators doubt giving companies an easier way to raise their rates will make hurricane-prone Florida more attractive to large national companies that could be risking their financial health if a major storm strikes. "It is a problem of geography," Stevens said. Sen. Mike Fasano, R-New Port Richey, who has been an opponent of the rate deregulation bills, said granting even a 10 percent average increase could lead to rate increases in the range of 20 percent or 30 percent in some coastal areas, since the cap was an average.

"That's totally intolerable," he said.

The Senate General Government Appropriations Committee on Tuesday also backed another major property insurance bill (SB 2044) that also gives insurers the ability to raise rates to pay for reinsurance and other costs as long as the overall rate does not exceed 10 percent a year. The bill also modifies the impact of discounts that insurers must give to residents who harden their homes against storm damage and changes the way consumers are reimbursed for property losses. Insurers have argued that the discounts, reinsurance and other factors that have undermined their ability to cover their costs with premium payments.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
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