Florida Gov. Charlie Crist has lined up three high-powered attorneys to bring a class-action suit against property insurers, who he says are violating a state law designed to help them reduce rates.

Dexter Douglass, one of the attorneys the governor revealed on Tuesday had been contacted, said today that the case would be handled in the same way as the massive government lawsuit against the tobacco industry that led to a $130 billion settlement.

In reaction, an insurance industry spokesman said the state was welcome to bring the suit because insurers have done nothing wrong.

Mr. Douglass, onetime general counsel to former Fla. Gov. Lawton Chiles, said he and the other attorneys would take on the cost of the case on a contingent-fee basis. Asked if the outlay would have to be substantial, he said, "I imagine it would be."

In addition to Mr. Douglass, Gov. Crist contacted Bob Hackleman, a Fort Lauderdale, Fla. trial lawyer, and Roberto Martinez, the former U.S. attorney from Miami.

Mr. Douglass said the governor asked him "to look into the probability of causes of action." At this point, said Mr. Douglass, because the attorneys had not gotten together and had time to look at the issue, there is no time frame for formally bringing a suit.

Earlier this year, the legislature passed a measure providing property insurers with reduced-cost reinsurance through the Florida Hurricane Catastrophe Fund, a move expected to give them savings they could pass on to policyholders.

Insurers, however, said most of the anticipated savings did not materialize because the carriers were already locked into deals with private reinsurers for a second, higher limit of coverage to protect their ratings and solvency.

While some insurers have dropped rates, the reductions have been nowhere near the projected 24 percent decreases, and state officials have challenged the way insurers arrived at their rates.

After Allstate Floridian Indemnity and Allstate Florida Insurance Company asked for hikes of 28.3 percent and 41.9 percent, respectively, the Florida Office of Insurance Regulation demanded that company officials appear for a hearing.

But first they have asked the insurer to respond to a subpoena demanding a truckload of information about the company's policies, its reinsurance program and its relationships with rating agencies, risk modelers and trade groups.

In response to news of Gov. Crist's action, Sam Miller, executive vice president of the Florida Insurance Council, said insurers "will defend ourselves in court, and we will be proven right. This industry has been proven right in similar lawsuits in Louisiana and Mississippi. We haven't done anything wrong, and we will be able to prove that."

Insurers, he said, had paid $37 billion on 1.5 million claims arising from hurricanes hitting the state in 2004 and 2005, and because they have had to raise rates, "we've been accused of every conceivable crime."

Other hurricane-prone states, he said, have worked in partnership with the industry to resolve insurance capacity and rate problems, but in Florida, "it's a war down here."

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Fla. Gears Up To Sue P-C Insurers Over Rates

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