Despite the urgings of Florida Insurance Commissioner Kevin McCarty and others, Gov. Charlie Crist has vetoed the omnibus property insurance bill passed at the close of the 2010 legislative session. Claiming that SB 2044 was unfriendly to consumers, Crist waited until almost the zero hour on Tuesday, June 1, to issue his veto. In rejecting the massive bill, he noted in particular that he was "most concerned about the expansion of the current expedited rate filing procedures for property insurers" and wrote that the bill makes "troubling changes in the way mitigation discounts are applied."
Those two changes were high on the "want list" of property insurers, along with language in the bill seeking to rein in the length of time that pubic adjusters could file claims on behalf of homeowners.
Reaction from the bill's proponents has been swift. The Property Casualty Insurers Association of America (PCI) issued an elegant statement in which it said it was "disappointed" in the veto, and "without the bill, we continue to confront the problem of a huge and growing financial risk that Floridians face from the next storm."
The Florida Insurance Council was equally circumspect. "A good-faith effort was made to pass a bill that tackled those problems," said FIC's Executive Vice President Sam Miller. "Unfortunately, the governor disagreed. There's just a gentlemen's disagreement." Perhaps most outspoken among the associations was the National Association of Mutual Insurance Companies (NAMIC). Neil Alldredge, senior vice president of state and policy affairs, said in a release, "Florida Governor Charlie Crist just doesn't get it… the governor decided to begin hurricane season by vetoing SB 2044 – legislation that would have continued the slow but steady progress that had been occurring for insurance consumers and companies in Florida. A great deal of time and effort went into crafting and compromising on the omnibus property insurance package…. Many other stakeholders invested countless hours in discussions and negotiations to achieve a bill that may not have made everyone happy but certainly would have resulted in some improvement in Florida's insurance marketplace. Gov. Crist has decided all that work was worthless. The governor's decision to veto this bill is nothing more than pandering to voters as he vies for a Senate seat, but those who understand the issue and the importance of this bill will know exactly why he made the decision he did."
Crist's fellow politicians also did not hold back. Current Senate President Jeff Atwater (R-North Palm Beach), and a candidate for the post of Chief Financial Officer, blasted Crist's action. "He yet again has found a way to mischaracterize the substance of legislation to advance his own political career," Atwater said. "Once again, he is the master of the game."
Atwater said the veto would likely be a "win" for Crist with uneducated consumers but is really a win for the insurance industry and will place him even more at odds with the Legislature.
"On the political front, if he's able to get people to buy the story that this is for the consumer and create yet again the mischaracterization of this bill to the people of Florida, that would be his objective and his goal to have a political victory, that 'I came to bat for the little guy.' That clearly is not what the case is here," Atwater said.
The bill's sponsor, Sen. Garrett Richter (R-Naples), was equally outspoken: "The only way I could rationalize a veto is pure politics," he said.
Scott Johnson, executive vice president of the Florida Association of Insurance Agents, expressed concern about the veto's effects: "It won't be a very pretty marketplace…. There will be a greater influx of policies into Citizens and there will be more companies becoming insolvent."
In an action garnering much less attention, Crist also signed into law S2176, General Bill/CS/CS/2ND ENG. The bill allows an insurer to implement rates for most forms of commercial insurance without the approval of the Office of Insurance Regulation, provided that the insurer notifies the regulator of any rate changes no later than 30 days after the effective date of the change. The regulator may subsequently review the rates to determine whether they are excessive, inadequate, or unfairly discriminatory.
The bill, which became law upon the governor's signature, also has workers' compensation implications. According to the bill's summary, it "provides for interpretation of provisions relating to workers' compensation benefits for certain services performed by off-duty deputy sheriffs. Prohibits an association, fund, or pool created for the purpose of forming or managing a risk management mechanism or providing self-insurance for a public entity from requiring its members to give more than 60 days' notice of the member's intention to withdraw from the association, fund, or pool, etc."
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