[StBernard] Gov. Crist's veto sends State Farm packing

[Westley Annis]

Gov. Crist's veto sends State Farm packing
By MICHAEL C. BENDER

Palm Beach Post Capital Bureau

Wednesday, June 24, 2009

TALLAHASSEE - State Farm officials said they have no option but to leave
Florida after Gov. Charlie Crist on Wednesday vetoed legislation to let them
offer unregulated property insurance rates.

"At this point, we have no choice," State Farm Florida spokesman Chris Neal
said.

State Farm, Florida's largest property insurer, announced in January that it
would discontinue 1.2 million policies in Florida due to the state's rocky
insurance market. This week, company officials said they would reconsider if
Crist OK'd the bill to let the state's most highly capitalized insurers
offer unregulated rates.

But Crist rejected it Wednesday, saying consumers would get higher rates and
little protection.

"This will likely result in significant and unpredictable rate increases
that, during these difficult economic times, people simply cannot afford,"
wrote Crist, who approved nearly $2 billion in higher state fees and tobacco
taxes earlier this year to balance the state budget.

The governor's view on the insurance bill (HB 1171) conflicts with most
Republicans in the GOP-dominated legislature, where the bill passed 105-13
in the House and 27-9 in the Senate.

"It's disappointing," said Sen. Mike Bennett, R-Bradenton, one of the bill
sponsors. "But we're trying to get more detailed information from the
governor's office about what exactly he would like to see changed to make it
more viable."

Bennett said there was little chance for lawmakers to override the veto, but
he would not dismiss the possibility.

The bill passed with more than the two-thirds needed for a rare override,
but the procedure would need approval in a special session, which could
happen later this year if the tax shortfall continues or if lawmakers return
to ratify a gambling compact with the Seminole Indians.

For the issue to be debated in a special session, it would need the blessing
of Senate President Jeff Atwater, R-North Palm Beach, who let the bill pass
his chamber in the spring despite his own opposition. Atwater could not be
reached on Wednesday.

House Speaker Larry Cretul, R-Ocala, said the veto was a "disappointment."

"Florida has demonstrated that over-regulating the insurance industry can
actually make things worse for consumers - not better," Cretul said in a
statement.

During the spring lawmaking session, the legislation was often called the
"State Farm bill," although it also would have applied to other large
insurers in the state. State Farm officials preferred to call it the
"Consumer Choice Act."

Supporters said homeowners would have been protected because the bill
required unregulated companies to inform customers about what rates they
could receive from the state-run Citizens Property Insurance Corp. or a
fully regulated private insurer.

"Charlie Crist has declared war on Florida homeowners," said Eli Lehrer of
the Competitive Enterprise Institute. "He is taking away choices, taking
away the market and taking away freedom."

But Crist rejected the idea that consumers would get a choice under the
bill.

"On the contrary, the bill actually gives the 'choice' to a select group of
property insurance companies and allows them to decide who they are willing
to sell a non-regulated policy," Crist said.
 

  
 
  
 

  
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