As I write this, the House and Senate are nearing the completion of a legislative special session, which supposedly contains the best solutions lawmakers can come up with to alleviate the problems with the homeowners' market. The problem is that the proposals on the table will do more damage than any single piece of insurance legislation enacted in decades. And even worse is the fact that while there are dissenters, no high-ranking public policymaker from Governor Charlie Crist on down has the fortitude to tell Florida citizens the truth. Simply put, you can't have it both ways. For all the talk of reforming Citizens Property Insurance Corporation, forcing the Florida Hurricane Catastrophe Fund to provide lower reinsurance, and touting some mythical 25 percent or 40 percent rate reduction, the first time a major hurricane hits the state it will result in eliminating the market as we know it with the ease of a wave washing away a sandcastle built by children.

Take, for example, the proposal to require Citizens' rates be actuarially sound, but no longer the highest rates in the market. Then they propose to freeze Citizens' rates at 2006 levels for this year and strike a planned 56 percent rate increase, which was based on a reinsurance factor in the rates. So much for depopulating the market of last resort. Lawmakers are then contemplating spreading the assessment rate over more policyholders when Citizens' population explodes and its losses inevitably exceed its revenues. It is the old bait-and-switch plan. Offer discounts today while remaining silent on the financial firestorm that will eventually come.

Crist recently said that he is not worried about homeowners having to face the burdens of paying for hurricane losses after the fact if lawmakers can deliver on lower rates now because the state is “already in the insurance business.” That is a strange statement from a Republican, as are the actions of the Republicans in both the House and Senate. Whatever happened to the Republican Party's fundamental principles of government is not the answer, and the belief that the free market holds the only real promise of long-term stability? Instead, we get proposals prohibiting eliminating Florida pup companies and demanding insurers who write homeowners' policies in other states to write homeowners' in Florida if they offer other forms of coverage in the state. That should be a real boom to the workers' comp, medmal, and commercial liability markets.