Gov. Charlie Crist says he will veto any legislation that raises homeowners insurance rates.
“If a bill gets to my desk that favors the insurers, I will veto it,” Crist told a group of Realtors convening at the state capital.
Crist’s opposition to higher insurance rates was welcomed by Wendell Davis, president of the Florida Association of Realtors, whose members spent the day visiting lawmakers on issues affecting their businesses.
But his stance is not appreciated by everyone in Tallahassee.
The industry and many lawmakers have warned that state’s entire property insurance system is substantially underfunded and without higher rates to generate more revenue, it could collapse if a major hurricane hits.
A recent analysis by the group TaxWatch found that the Florida Hurricane Catastrophe Fund faces a potential shortfall of $7 billion. It said that repaying the bonds needed to finance the shortfall would cost Florida almost $4 billion annually, resulting in a loss of more than 70,000 jobs.
“Should a major storm hit, Florida will be forced to borrow tens-of-billion of dollars – more money than any state has ever borrowed – and the interest payments alone will suck billions of dollars out of the state for decades to come,” warned Rep. David Murzin, at the event announcing the release of the report.
Murzin said that with hurricane season approaching and the legislative session coming to a close, the Legislature should take action to reduce the state’s financial exposure through the state insurer Citizens and the hurricane fund.
Insurers are lobbying for measures that would lift controls on the rates they can charge. Crist vetoed a similar measure last year and has vowed to do so again.
Former Gov. Jeb Bush has entered the fray, voicing support for a bill proposed by Sen. Mike Bennett, R-Bradenton like the one Crist vetoed last year that would deregulate prices charged by property insurers.
“We have a lot of undercapitalized insurance companies that might not make it through a 2004 or 2005 or … an Andrew (1992) type storm,” said Bush, who was governor when Florida was devastated by eight major hurricanes in 2004 and 2005. “In the worst case scenario, the taxpayers will be liable in some fashion.”
The state has escaped experiencing a serious storm for the past few years but even with that good fortune, about 80 of the state’s more than 200 domestic carriers are reporting losses, according to state regulators. Within the past year, several insurers have gone out of business.
Colorado State University’s hurricane forecasters and others are predicting an above-average Atlantic hurricane season and an above-average probability that major hurricanes will hit land in the U.S.
Other property insurance bills currently under consideration in Tallahassee would require more disclosure about payments insurers make to affiliated entities and give insurers more control over claims payments.
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