State Rep. Alan Hays on Wednesday called for the Legislature to investigate property insurance companies in Florida, citing the millions executives made in bonuses and other perks as the companies threatened to leave Florida and begged the state for higher rates to make them profitable.
"We certainly need to have answers as to whether the practices were appropriate," said Hays, R-Umatilla, a member of the House Insurance, Business & Financial Affairs Policy Committee.
Citing a year-long investigation conducted by the Sarasota Herald-Tribune -- "How insurers make millions on the side" -- Hays said he wants to hold hearings to sort out the truth much like they do in Congress. The committee's chairman Republican Pat Patterson, a senior account agent at Allstate, dodged discussion of the issue. (The lawmakers, including Hays, then approved a measure to give insurance companies the ability to offer unregulated rates.)
Hays isn't the only Florida politician wanting answers to the questionable practices exposed in the newspaper's series. Chief Financial Officer Alex Sink is asking Florida Insurance Commissioner Kevin McCarty to appear before the Cabinet on Tuesday.
But still Hays voted for a controversial deregulation bill (HB447), sponsored by Rep. Bill Proctor, that would allow property insurance companies to offer an unregulated policy to homeowners. The legislation caps the annual cost increases at 5 percent for the first year and 10 percent and then 15 percent in future years.
Republicans are pushing the measure as a "market-based" proposal that would allow homeowners to bear the true cost of the policy and get better service in return. But critics including Sean Shaw, the Florida Consumer Advocate, suggest it will limit options for homeowners to this Cadillac plan for Citizens, the state-backed insurer. "To raise the rates and never have to prove to (the Office of Insurance of Regulation) that there rates are justified," Shaw said.