Months of tough talk come to a head at session

Gov. Charlie Crist says he's awoken at night, worried about the insurance horror stories he's heard over the last year.

"There's very little time I'm not thinking about how to have success for the people," the governor said last week. "It's frightening, isn't it? It's been a nightmare for a lot of people, literally."

Crist the candidate exuded a simple, details-free confidence last fall that cutting rates was as simple as dropping a hammer on insurance companies.

Now as governor, Crist is waking up to a political reality his predecessor called impossible.

Florida lawmakers return to work Tuesday, intent on making sweeping changes to how the state pays for major storms, entices insurers to do business in hurricane alley, and exacts fair premiums for homeowners.

From the voters' perspective, the expectation is simple: lower rates, sooner rather than later.

"This is obviously a big issue, and it needs to be addressed," said Mike Hill, pastor at St. Cyprian's Episcopal Church in downtown Pensacola. "The suffering is widespread."

Hill, 52, is one of those suffering under the weight of skyrocketing insurance premiums.

"Our insurance company dropped us this year. We had to find new coverage," Hill said. "Now we're paying double what we were paying."

Big promises, back-tracking

Touring eight media markets a day before his Nov. 7 election victory, Crist never wasted a chance to peer into a TV camera lens and say, "We've got to lower insurance rates."

Crist told reporters he didn't like the insurance legislation coming out of Tallahassee.

Now, less than a year after lawmakers proclaimed in May that Florida's real problem was rates set too low, a Legislature filled with dozens of new members is marching to Crist's tune, targeting the industry full bore.

The easy support is more than a honeymoon for the new chief executive. Lawmakers are fresh from a campaign dominated by insurance rate complaints.

"I think we should be judged by what we accomplish this week, and I think we will," said freshman Rep. Gary Aubuchon, R-Cape Coral.

Ready for repeal are pieces of last year's bill that gave private insurers more freedom to raise rates and forced the state-run Citizens Property Insurance to do the same.

Last spring's legislation "wasn't just a free credit card to raise rates," said Senate Banking and Insurance Chairman Bill Posey, R-Rockledge.

"But when you leave, and people start applying for 70 percent and 80 percent rate increases, you start to look at things differently."

The House is backing two of Crist's campaign promises: stopping national insurance companies from creating Florida-only subsidiaries, called pups; and forcing Florida insurers that sell homeowners' policies outside the state to offer them here, too.

The Senate is cool to the idea, and the business and insurance industries downright icy.

Instead of lowering rates through more competition, they argue it will make insurers less willing to take a chance on Florida.

"That's going to send the wrong signal to insurers who might want to come into the state," said David Daniel, the Florida Chamber's vice president of governmental affairs.

Tougher regulation

Missing from draft legislation is Crist's campaign pledge to give insurance companies a letter grade like public schools, based on their customer service.

Both chambers have included plans to end automatic rate increases companies can impose before getting state approval. The tone is the opposite of what lawmakers struck last year when their aim was to lure insurers back into the state.

Critics say the rush is likely to give a quick fix to ailing ratepayers but do long-term damage to the private market.

"If we create more regulations, more mandates and rate rollbacks, then we will have even fewer companies willing to do business in Florida," said Barney Bishop, president of Associated Industries of Florida, one the state's largest business lobbying groups.

Crist disagrees.

"All these ideas promote competition," the governor said. "I don't know a lot about the insurance industry ... but I do know rates are high. And if we have a chance to lower them, then there will be more competition. More people will have an opportunity to make money in this field."

National disaster fund

One universal campaign pledge from the fall is to continue pushing Washington to create a national disaster fund to bail out states after catastrophic storms, earthquakes, wildfires or other disasters.

There's little Florida can do on its own.

The House proposes a "memorial," little more than a strongly worded suggestion to federal lawmakers and regulators.

Crist said he would press the issue at a National Governors Association meeting in February.

Business groups say the idea will never fly in Congress as long as small states can derail the concept -- and have just as much clout as big states like Florida and California -- in the U.S. Senate.

But the federal government could have a big role to play if Florida lawmakers are successful.

Critics feel Florida would be punting responsibility for a Hurricane Katrina-sized storm by allowing the state's Cat fund to venture into offering unlimited reinsurance to carriers. After such a storm, Florida ratepayers could be on the hook for billions of dollars in payouts to insurers and could have to lean on the federal government for a bailout, supporters admit.

"There are all different levels of risk," Crist said. "We believe the proposals that have been put forward are responsible ... and most importantly will provide relief for our people."

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Aaron Deslatte
News Journal capital bureau

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