Now, I’m not in the insurance business, but this doesn’t make sense to me. Is the Insurance Division so informed as to the costs of insurers that they know exactly how much insurers can afford to reduce rates? Or are they just picking arbitrary numbers out of the air? Does the governor down there realize that insurance is a business?
Not much makes sense in “Wonderland”. Insurers are limited to a gain of around 3.5% by law. Reinsurance from a “state controlled” reinsurer is mandatory even if the reinsurers primary asset is its ability, if the legislature agrees, to issue assessments to all policy holders except those that polically conected.
Rate decreases following the losses in 2004 are not going to lead to any solutions either short term or long term.
The Governor realizes insurance is a business but he’s a politician. It’s popular appearing to be for the little guy and against big evil insurance companies. Power is the most important thing to politicians, most of which are ego driven. Therefore maintaining power, for him or his party, is paramount. When the s— hits the fan it will be blamed on those greedy insurance companies.
in Property than they are PIP and their PIP law is supposed to sunset in October…any rumors as to what the legislature is going to do with it? Let it expire or what?
The governor nor does any regulatory agency have any such insight into pricing. The other posters are correct, it is about politics and ultimately power. Gov. Crist is a panderer of the very highest order and he will do or say anything to garner votes, press, fame and, of course power. It is simple for him to beat up on insurance companies and other “evil companies” and say they shouldn’t “make a profit on the backs of Floridians”. But, the proof of his failure is all around. Carriers continue to withdraw from the state and it is likely, on our present course that we will see no major habitational property insurance player in Florida in the next several years. This will leave any insurance to the local and financially suspect carriers and the state pool, Citizens. On Monday, another of our carriers, Hanover, announced that it will not continue homeowners coverage in Florida and will transfer all it’s policies to a new company, First Home (no track record, AM Best rating or financial strength. Hanover is dumping the business because they just can’t use Charlie Crist as a guide for pricing, unreasonable and anti-competitive rules and regulations.
It all makes perfect sense for Charlie Crist. So far, our Panderer-in-Chief is getting great press from a complicit media. Every confrontational word from Crist is front page news. He learned from John Garamendi: no matter how bad things get, no matter how many carriers leave the state, he will never shoulder any blame as long as he attacks the companies for being greedy. Consumers are getting screwed by the Governor and his irresponsible policies…but they don’t know it and they wouldn’t believe it, anyway. Too bad…this could be fixed several different ways and Crist could be a real hero but he prefers striking a pose on the issue and having people ooh! and ahh! at his “toughness.”
I happen to be a former WI ins agent who is now a FL resident and prior to that a 14 yr snowbird. I see a lot of critizm for the Governor however what has the industry offerred as a solution? After 100% rate increases in 2005, then 100% in 2006 reflecting the 2005 losses all of which were understandable. Then came 2006 and no hurricanes. So what did the companies want in 2007? Moree rate increases. What is the right premium level that the industry keeps talking about? They say Crist is all wrong. So what should be done?
For all of the responders that are critical, what are you proposing?
As an agent in Florida, I am outraged at our elected officials for not doing anything about our upcoming lapse/sunseting of PIP. If this is allowed to happen then NOBODY will have to have any form of auto insurance whatsoever (because PROPERTY DAMAGE is tied to PIP). Sure it will mean that agents will go out of business, but as a driver with children, I’m scared to death of the other guy who will have no coverage at all.
WAKE UP FLORIDA, if this happens the black eye that we got for vote counting in the elections will be a minor memory compared to the ridicule that we as a state will receive for allowing us to slip back into the dark ages of no insurance. Our Governor deals with only what is popular and in the news. I personaly have talked with radio and print media who dont believe there is any story so they wont address the issue.
Property is a big problem in this state but not everyone owns a house, most people however own 1 or more cars and wont be required by the state to be financialy responsible for damage they may cause to people or property.
Regarding PIP/PD going away – When nobody has to carry any liability insurance for any compensable damages they’ve caused others.. everyone’s on their own for whatever coverage they have for bodily injury to themselves, household family members, and possibly guests in their vehicle, should someone hit them and have no coverage. The Uninsured Motorist costs are going to eventually go up, as well as Medical Payments Coverage, under just the responsible persons’ insurance. Why is it fair that if I’m carrying liability and injure someone with no insurance, that my insurance pays, yet this same uninsured jerk can hit and injure me and I / my insurance still has to pay for this also?
There is such a huge disconnect here.. it’s hard to understand.
Regarding Property – The state seems to pay no regard to how much reinsurance the insurers are statutorially required to carry by the rating agencies. When the rating agencies see that a company is undercapitalized as compared to the liability on their books, as is calculated by various solvency ratios using NAIC’s short list of admittable assets, they downgrade the insurers. This, in turn, devalues the insurer’s stock, the bond rating, and drives up risk premium factors from lenders, analyists, as well as capital / investment markets in general. The state wants to regulate “profit”, which is a number they determine without regard to long-term liquidity (beyond 12 months) and while focusing on written premium, prior to the net earnings after expenses and/or full accrual for exposed assets. Reinsurance is being limited, insurers withdraw their williness and ability to provide capacity, rates are suppressed, insurers shed known risks that are not adequately being offset by more spread of risk, and the circle spirals downward.
Since we’re already skipping merrily down the path, let’s just self-insurer PIP and Wind in Florida. Let’s do it ourself, what’s the difference? We may as well charge something for our ultimate losses now, rather than one day wondering just where we’re going to get the money to pay for all the uninsured medical bills and uninsured wind damage to abandoned property.
Let’s not forget bailing out our hospitals and providers of emergency care services. Red Cross, FEMA, and disaster fundraisers can only go so far!
What I’m failing to understand is why a rate decrease (even if less than what the government wants) was declined. One would think that they would accept the initial decrease for some immediate relief and work with the companies for a more substantial decrease down the line.
Now, I’m not in the insurance business, but this doesn’t make sense to me. Is the Insurance Division so informed as to the costs of insurers that they know exactly how much insurers can afford to reduce rates? Or are they just picking arbitrary numbers out of the air? Does the governor down there realize that insurance is a business?
Not much makes sense in “Wonderland”. Insurers are limited to a gain of around 3.5% by law. Reinsurance from a “state controlled” reinsurer is mandatory even if the reinsurers primary asset is its ability, if the legislature agrees, to issue assessments to all policy holders except those that polically conected.
Rate decreases following the losses in 2004 are not going to lead to any solutions either short term or long term.
The Governor realizes insurance is a business but he’s a politician. It’s popular appearing to be for the little guy and against big evil insurance companies. Power is the most important thing to politicians, most of which are ego driven. Therefore maintaining power, for him or his party, is paramount. When the s— hits the fan it will be blamed on those greedy insurance companies.
I am sure if Dean should strike Florida
Photo-op Charlie will be hiding in the closet
in Property than they are PIP and their PIP law is supposed to sunset in October…any rumors as to what the legislature is going to do with it? Let it expire or what?
There is no news about insurance because Charlie is in the closet
The governor nor does any regulatory agency have any such insight into pricing. The other posters are correct, it is about politics and ultimately power. Gov. Crist is a panderer of the very highest order and he will do or say anything to garner votes, press, fame and, of course power. It is simple for him to beat up on insurance companies and other “evil companies” and say they shouldn’t “make a profit on the backs of Floridians”. But, the proof of his failure is all around. Carriers continue to withdraw from the state and it is likely, on our present course that we will see no major habitational property insurance player in Florida in the next several years. This will leave any insurance to the local and financially suspect carriers and the state pool, Citizens. On Monday, another of our carriers, Hanover, announced that it will not continue homeowners coverage in Florida and will transfer all it’s policies to a new company, First Home (no track record, AM Best rating or financial strength. Hanover is dumping the business because they just can’t use Charlie Crist as a guide for pricing, unreasonable and anti-competitive rules and regulations.
It all makes perfect sense for Charlie Crist. So far, our Panderer-in-Chief is getting great press from a complicit media. Every confrontational word from Crist is front page news. He learned from John Garamendi: no matter how bad things get, no matter how many carriers leave the state, he will never shoulder any blame as long as he attacks the companies for being greedy. Consumers are getting screwed by the Governor and his irresponsible policies…but they don’t know it and they wouldn’t believe it, anyway. Too bad…this could be fixed several different ways and Crist could be a real hero but he prefers striking a pose on the issue and having people ooh! and ahh! at his “toughness.”
I happen to be a former WI ins agent who is now a FL resident and prior to that a 14 yr snowbird. I see a lot of critizm for the Governor however what has the industry offerred as a solution? After 100% rate increases in 2005, then 100% in 2006 reflecting the 2005 losses all of which were understandable. Then came 2006 and no hurricanes. So what did the companies want in 2007? Moree rate increases. What is the right premium level that the industry keeps talking about? They say Crist is all wrong. So what should be done?
For all of the responders that are critical, what are you proposing?
As an agent in Florida, I am outraged at our elected officials for not doing anything about our upcoming lapse/sunseting of PIP. If this is allowed to happen then NOBODY will have to have any form of auto insurance whatsoever (because PROPERTY DAMAGE is tied to PIP). Sure it will mean that agents will go out of business, but as a driver with children, I’m scared to death of the other guy who will have no coverage at all.
WAKE UP FLORIDA, if this happens the black eye that we got for vote counting in the elections will be a minor memory compared to the ridicule that we as a state will receive for allowing us to slip back into the dark ages of no insurance. Our Governor deals with only what is popular and in the news. I personaly have talked with radio and print media who dont believe there is any story so they wont address the issue.
Property is a big problem in this state but not everyone owns a house, most people however own 1 or more cars and wont be required by the state to be financialy responsible for damage they may cause to people or property.
Regarding PIP/PD going away – When nobody has to carry any liability insurance for any compensable damages they’ve caused others.. everyone’s on their own for whatever coverage they have for bodily injury to themselves, household family members, and possibly guests in their vehicle, should someone hit them and have no coverage. The Uninsured Motorist costs are going to eventually go up, as well as Medical Payments Coverage, under just the responsible persons’ insurance. Why is it fair that if I’m carrying liability and injure someone with no insurance, that my insurance pays, yet this same uninsured jerk can hit and injure me and I / my insurance still has to pay for this also?
There is such a huge disconnect here.. it’s hard to understand.
Regarding Property – The state seems to pay no regard to how much reinsurance the insurers are statutorially required to carry by the rating agencies. When the rating agencies see that a company is undercapitalized as compared to the liability on their books, as is calculated by various solvency ratios using NAIC’s short list of admittable assets, they downgrade the insurers. This, in turn, devalues the insurer’s stock, the bond rating, and drives up risk premium factors from lenders, analyists, as well as capital / investment markets in general. The state wants to regulate “profit”, which is a number they determine without regard to long-term liquidity (beyond 12 months) and while focusing on written premium, prior to the net earnings after expenses and/or full accrual for exposed assets. Reinsurance is being limited, insurers withdraw their williness and ability to provide capacity, rates are suppressed, insurers shed known risks that are not adequately being offset by more spread of risk, and the circle spirals downward.
Since we’re already skipping merrily down the path, let’s just self-insurer PIP and Wind in Florida. Let’s do it ourself, what’s the difference? We may as well charge something for our ultimate losses now, rather than one day wondering just where we’re going to get the money to pay for all the uninsured medical bills and uninsured wind damage to abandoned property.
Let’s not forget bailing out our hospitals and providers of emergency care services. Red Cross, FEMA, and disaster fundraisers can only go so far!
I know you can get info on what the state Insurance Association is trying to do for both property & PIP. FAIA.com
What I’m failing to understand is why a rate decrease (even if less than what the government wants) was declined. One would think that they would accept the initial decrease for some immediate relief and work with the companies for a more substantial decrease down the line.