Florida Gov. Charlie Crist convinced Cabinet members to approve a rule that will prevent property insurers from canceling Florida policies for much of the rest of this year. The emergency rule will freeze insurance rates and prevent cancellations through the end of Nov. 30, the hurricane season.
The freeze came just a week after Crist signed into law a wide-ranging bill that is expected to result in lower rates.
Crist told his fellow Cabinet members that the Legislature had “the backbone” to stand up to the insurance industry and that now it was time for the Cabinet to do the same.
Crist’s freeze rule would prevent companies from filing for new rate increases without taking into account changes in the bill, some of which won’t be in effect until this summer.
Another part of the rule also prevents companies from dropping customers, in effect saying that they can’t respond to the new requirements that are expected to lower rates by simply canceling policies.
Despite part of the rule remaining in effect only until May, companies still won’t be able to cancel policies because of another part of the new law that prevents them from dropping customers close to hurricane season, which starts June 1 and ends Nov. 30.
Crist said he expected that without the rule, insurers would try to find a way to get around the new law any way they could.
Guy Marvin, president of the Florida Insurance Council, which represents several large insurers, said the move would have a “drastically negative impact on the financial statements of some of our members.”
Mark Delegal, a lobbyist for Nationwide Insurance and State Farm Florida Insurance Co., argued that the two companies are trying hard to stay in the state, and yet are being punished with rules like the one the Cabinet approved.
The emergency rule did not stop one major insurer from making plans to drop policies as soon as it is permitted to do so. The Hartford Financial Services group announced it will drop about 38,000 property insurance policies within the next 18 to 30 months, about a third of its business and personal policies in the state. The company stressed that it was not pulling out of the state and that its 80,000 Florida participants in a separate program with the AARP will not be affected by the cutback.
Separately, the president of Tower Hill Insurance Group Inc. said that the Gainesville company has stopped writing new policies in 16 Florida counties .
Topics Florida Carriers Legislation
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