Some insurance companies could go out of business if a major hurricane hits Florida, the state's insurance commissioner told a Senate panel Tuesday.

But after more than an hour grilling by lawmakers, Commissioner Kevin McCarty didn't provide specifics on which companies might fail or why, telling senators that it's all part of being in the risk business.

"Florida remains the epicenter in terms of concentration of risk," McCarty told the Senate Banking and Insurance Committee, chaired by Sen. Garrett Richter, R-Naples.

McCarty, who has frequently sparred with lawmakers on the state's insurance regulations, said Florida's property insurance liability is now $2.1 trillion, which would likely bankrupt even some of the largest insurers.

"Failure is going to happen," McCarty re-emphasized afterward with reporters. "They are in a risk assuming business."

The lawmakers zeroed in on the viability of the property insurance marketplace across Florida, but some remained skeptical afterward, especially with what they see as politics by the governor's office and McCarty to kick State Farm Florida out of the state over rate filing disputes.

"He's artful at evading real answers to the questions," Sen. JD Alexander said after the meeting, adding that it is foolish to remove a highly capitalized company that has paid claims for 150 years from the state.

Alexander said Crist's campaign rhetoric on holding down property insurance rates amounts to little more than a "Trojan Horse" that he said fails to protect consumers.

Richter said the committee was disappointed that Crist vetoed a bill earlier this year that would have allowed consumers to pay unregulated rates to buy coverage for hurricanes and other hazards from highly capitalized, solvent national insurers such as State Farm.

"It's going to take increased competition," Richter said. "I hope OIR can conclude satisfactory negotiations with State Farm to retain that capital in the state. Let the marketplace sort it all out."

The bill was in part in response to a decision by State Farm Florida to withdraw from the state after McCarty denied a rate increase company officials said they needed to remain financially viable.

The company is a Florida-only property insurance subsidiary of Bloomington, Ill.-based State Farm Insurance, which intends to continue selling auto and life insurance in the state.

Alexander also disputed claims by officials from the state-backed Citizens Property Insurance Corp., who said they could make timely payments on claims after a 100-year storm.

"If we had a significant event it's very unlikely we'd be able to pay the bills in a timely way," said Alexander, a Republican citrus grower from Lake Wales.

Roughly one million Citizens customers will see a 10 percent increase in their premiums Jan. 1, but that still wouldn't come close to making the company solvent. The board that oversees the state-backed insurer approved the increase in July, ending a three-year rate freeze for businesses and homeowners insured by Citizens.

Copyright 2009 Miami Herald Media Co. All rights reserved