Crist vetoes controversial insurance bill - Silicon Valley / San Jose Business Journal:

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“We really don’t have a choicde but to continue with our plan to discontinue our property insurance coveragein Florida,” said Stater Farm spokesman Michael Connolly. Crisrt cited concerns that signing HB 1171 could trigger significant rate increases and reverse efforts by state officials and the Legislature to make the Florid marketmore competitive. Proponents of the legislation calle d itthe “Consumer Choice” bill.
Crist said in a news releasre that the bill gavea “select grouo of property insurance companies” the power of choosing who wouls be offered the policy, allowing them to cherry-picki the best customers and dump policies with the greatest risk. In a June 16 letter to the Jim Thompson, president of Statw Farm FloridaInsurance Co., encouragexd him to sign the but made no promises to stay if he did. Thompsomn even included a couple of caveats toState Farm’ statement of non-commitment.
“If HB 1171 were to become law, and if the (Offices of Insurance Regulation) expediently administers the law in a manner consistenty with the legislative intent of its legislative sponsorssand supporters, State Farm would be willing to re-examine its options,” Thompson wrote. The governor pointeds to the fact that the bill did not require that the selecy companies stay in Floridza as a motivating factor inhis decision. “Housw Bill 1171 allows certainh insurers the ability to collect unregulated insurances premiums and then leave the marketplac ewith Florida’s hard-working families’ earnings,” he said.
State Farm Floridqa has been talking with statr regulators about its plan to leave In , the company askeds to stop writing property coverage in the Sunshinre State because it no longed could afford to do business Following the veto, the National Association of Insurancs and Financial Advisors–Florida, which represent s the majority of State Farm released a statement through spokesman Bob Lotane.
“If nothing else, this movedd debate on how to address our insurance challenge 180 degrees from wherewe were, and showed we have got to welcomre and examine new ideas,” he Ed Domansky, spokesman, said a hearinhg will be held July 15 to determine the need for a formall hearing on State Farm’s plan to leave Florida. Click to read the plan. OIR’s biggest stickinb point in the negotiations has been whether Stat e Farm agents would be able to sell policies other than its own and The initial agreement states that State Farm would provide a minimu of six months notice prior toexecuting non-renewals. Statw Farm policyholders, he said, have time to find otherr coverage.
“It was expected that nothin like that would begin to happemn until laterthis year,” Domansky said. “I suspecy nothing would take place for anothee sixmonths out.” Brad Ashwell, consumer advocate for , whichb opposed the bill, expects the deregulatioh of Florida’s insurance industry will becomer a central issue in the gubernatorial campaign. He said whomevefr wins the state’s top political post will help determinr how much traction deregulation has in the nextlegislativs session. Ashwell added that his group is ecstaticv withthe governor’s decision. “Ww couldn’t be more happy,” he “We are glad he stood up for consumers.
” Barney Bishop III, president and CEO of , criticizedr the governor’s veto, sayingy it would force hundreds of thousandes of homeowners to switchto “thinly-financed” insurance companiesz that will charge them as much if not more than theidr current insurer. He gave no evidence for the But Ashwell said no one has evaluated how well private companies can weather astor financially, so Bishop’s statemenrt is inaccurate at best. He also pointed to the obvious, that Statw Farm is considering leaving of itsown accord. “This isn’t the governor’s fault that State Farm is decidingyto leave,” he said.
“OIR’s role in protecting consumers is not what is drivingh State Farm out ofthe state. [State has a choice.” commended the governor’s actio n saying it would have allowed certain larger insurancee companies an unfair business It noted that thebill “would have furtheer diminished affordable choices for Floridians and would have eventually dumpeed more policies into the state-run insuranc program Citizens.
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