Florida Gov. Charles Crist has signed legislation that puts the onus on insurance companies to justify premium increases, while at the same time freezes rates for the state's property insurer of last resort, which critics charge is woefully undercapitalized.
While signing the bill, the governor also vetoed a provision that would have provided $250 million to continue a program that provides incentives for small insurers willing to come to the state and write some business now placed with the state-backed Citizens Property Insurance Corp.
The new law tightens oversight over insurers and bars them from increasing rates on homeowners' policies without prior state approval. It abolishes arbitration panels, which had the authority to approve rate increases denied by the Office of Insurance Regulation, and says insurers can only use hurricane models that have been approved by the Florida Commission on Hurricane Loss Projection Methodology.
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