Bennett bill would affect insurance commish's job security

In politics, payback can be a real ...well, you know, female dog.

Sen. Mike Bennett insists his just-filed bill isn't payback, but it sure could affect the job security of Insurance Commissioner Kevin McCarty.

SB 740 would require that the Cabinet, acting as the Financial Services Commission, reconfirm the insurance regulation leader every two years -- and send their vote to the Senate for final reconfirmation. Right now the insurance commish is appointed and confirmed once, and that's it.

But we can't help noting that Bennett is no BFF of McCarty, after this past summer's fight over the proposed rate dereg bill for private, big-name insurers like State Farm. McCarty voiced objections. The governor vetoed the bill. Bennett, who sponsored the bill with Rep. Bill Proctor, blasted McCarty's criticism of the legislation and questioned the facts he used to back up his criticism.

Fast forward to this week, and here is Bennett filing the bill requiring reconfirmation. (It is not the first time
McCarty's been a target. CFO Alex Sink, you'll recall, is no fan, either...)

Alexander's storm warning on state budget

It was just another snooze-inducing meeting of the Legislative Budget Commission Tuesday -- until Sen. JD Alexander, R-Winter Haven, suggested tweaking the state's official long-range financial outlook with some sobering property insurance data that he said "still nags at me."

Alexander is the Senate budget chief, and one who has never been fond of Gov. Charlie Crist's 2007 decision to massively increase the state's exposure to cover hurricane losses. The senator suggested adding this one-page revision to the outlook, laying out the potential financial catastrophe to Florida's Hurricane Catastrophe Fund and to Citizens Property Insurance Corp., the state-backed insurer of last resort.

As one who serves on the board of a publicly-traded corporation, Alexander said, he's required under the federal Sarbanes-Oxley legislation to disclose "all significant risks" to the firm's solvency, and he said state government should operate the same way. "The people of Florida don't expect us to sugar-coat anything," Alexander said. "The truth is the truth."

Alexander's revision was added on a 9-1 vote. Only Sen. Al Lawson D-Tallahassee, voted no, saying that if all worrisome financial factors must be laid out, then billions of dollars in tax cuts should, too.

-- Steve Bousquet

OIR Ok's all but one State Farm request to drop discounts

Insurance Commissioner Kevin McCarty announced today that his office has approved all but one of State Farm's requests to abandon or trim its discounts to its homeowners policyholders.

State Farm did not get approval to cut back on breaks for homeowners who shore up their homes against storm damage.

Sen. Mike Fasano, who expressed great displeasure last month when State Farm filed request, this afternoon said he is "disappointed with State Farm and will continue to be."

"They made promises to their customers and they are breaking those promises," Fasano said. "But I'm pleased with OIR that they are not doing away with the mitigation discount."

State Farm officials say the reduced and eliminated discounts are necessary for the company to "remain solvent" through the months ahead as they slowly withdraw from the property insurance market in Florida.

Amid consumer protest, Crist says he doesn't like insurance bill

Gov. Charlie Crist said this morning that he continues to have concerns about the property insurance bill (HB 1171) that allows for large, well-capitalized companies like State Farm, to go unregulated.

"To have that industry unregulated in essence is not something that is appealing to me nor is it fair to the customer,'' Crist said at a morning media availability.

Meanwhile, the Consumer Federation of the Southeast and the Florida Public Interest Research Group called on the governor Wednesday to veto the bill.

"This should be a no brainer veto,'' said Walter Dartland, director of the Consumer Federation. "It will allow the major property insurers to raise rates any way they want.''

He warned that when a similar deregulation was allowed for property insurance of condominiums, "State farm dramatically increased rates over several years and then decided not to renew the policies. There's no reason for me to think that anything different can happen here.''

Fasano clashes with Bennett, backs McCarty

Republican Sen. Mike Fasano of New Port Richey has rushed to the defense of state Insurance Commissioner Kevin McCarty, whose resignation was demanded by Sen. Mike Bennett of Bradenton in a letter to Gov. Charlie Crist.

"He is one of the most highly qualified and experienced individuals to hold this important post," Fasano said in a statement issued Friday from a legislative aide's BlackBerry. "Florida needs his steady hand to steer through the unique insurance challenges that continue to be part of Florida's landscape."

Fasano's statement did not mention Bennett by name, but he got his point across by ending this: "In a town in which insurance companies wield so much power, he (McCarty) has been a voice of reason and stability. During the many years I have worked with him he has never hidden his deep desire to make sure that consumer-friendly legislation and policy were his top priorities."   

-- Steve Bousquet

Remember that class action lawsuit against insurers?

Remember that class action lawsuit against insurers? We were reminded it of today when the Bradenton Herald mistakenly posted a very old Miami Herald story -- from Dec. 19, 2007 -- about the governor's office engaging the help of three big-name lawyers to consider suing the insurance industry.

His office had talked to Roberto Martinez, the former U.S. attorney from Miami who chaired Crist's transition team; Dexter Douglass, the former general counsel to Gov. Lawton Chiles who worked on the state's litigation against the tobacco industry, and Bob Hackleman, a Fort Lauderdale trial lawyer with Gunster, Yoakley & Stewart, to look into the lawsuit at no cost to the state.

When asked about it today, Gov. Charlie Crist was a bit taken aback. But the question is still legit: whatever happened to it?

"I'll have to get back to you on that,'' Crist said, saying he's referred it to Lt. Gov. Jeff Kottkamp. "I'm happy to report to you that property insurance rates are down...Overall, it's about 16 percent down -- rates -- across the board. We've essentially kicked out the bad actors.''

So you've ruled out a lawsuit? "No,'' he said.

J.D. cries foul; Citizens says no game

Sen. J.D. Alexander, R-Winter Park, shot off a letter to the state's insurance company Monday asking why Citizens Property Insurance thought it needed a fitness center and restaurant at its new digs once its lease on its Tallahassee office space expires in 2010.

".... the amenities under consideration for inclusion in the final contract, such as a fitness center, restaurant and concierge services, are of concern," Alexander wrote in his letter to Citizens board chairman, John Malone.

But Citizens' spokeman John Kuczwanski said the insurer isn't demanding the amenities be included, but asked about them in the RFP it issued. Citizens would like to consolidate its two current facilities in one campus with the new lease.

He noted that a few other state agencies are located in buildings where there is a restaurant facility such as the Department of Enviromental Protection, and the State Capitol has a cafeteria.

Besides, Kuczwanski said, the top two vendors who have responded to Citizens' request so far don't include restaurants, fitness centers, or conceirge services on their properties. He said it was more important to Citizens to find a building that is reinforced to withstand hurricanes, has generator back-up and can accommodate expanded IT facilities because the insurer would get up a catastrophe operations center there when major storms hit the state.

Kuczwanski said Citizens is negotiating with two vendors right now, but hasn't disqualified any vendor at this point. Citizens' staff would like to have a recommendation for the board of governors to consider at its next meeting on Oct. 24.

-- BEA GARCIA

State says it will reject State Farm's 47 percent rate hike

Florida Insurance Commissioner Kevin McCarty just announced that his office will reject the massive rate hike sought by State Farm. The company requested an average increase of 47 percent that would have meant rate hikes of as much as 63 percent or $8,300 in Dade County.

Deputy Commissioner Belinda Miller said that after the Aug. 12 public hearing and the subsequent review of State Farm's request, they determined the company couldn't justify the increase. State Farm now has 21 days to appeal. Download news_release_florida_office_of_insurance_regulation_issues_notice_of_intent_to_disapprove_proposed_rate_hike_for_state_farm_florida.htm 

Crist vetos Citizens transfer, complaining it leaves insurer vulnerable

Gov. Charlie Crist has vetoed the attempt by the Legislature to divert $250 million from the reserves of Citizens Property Insurance to entice private insurers to write more homeowner's policies by providing them with state-subsidized low-interest loans as back-up capital.

Crist commended the legislation for its "consumer protections" but he warned that by taking $250 million from Citizens' ability to pay claims "will substantially increase the likelihood of assessments for Floridians across the state.'' He said he "would not support risking an additional financial hardship on Floridians." Download property_insurance_2860.pdf

The insurance bill also freezes Citizens Property Insurance rates for another year and doubles fines state regulators can impose.

Court upholds ban on Allstate business until it obeys state

The First District Court of Appeals ruled Wednesday that the decision by Insurance Commission Kevin McCarty to suspend the company's license to write business in Florida was appropriate and denied the company's motion for a rehearing. Read full story here.

McCarty made the decision after Allstate refused to complie with a subpoena for documents and information about its property insurance line.