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.

Crist to Realtors: Keep on keepin' on

Gov. Charlie Crist painted a bright picture of Florida's housing market Wednesday during a gathering of the Florida Association of Realtors at the Capitol.

He thanked the real estate agents for their influence in helping pass the property tax amendment that Florida voters approved on Jan. 29.

Besides property tax reductions allowed by the amendment, it also provides Florida homeowners with portability savings if they move into a pricier home. So far, 5,000 Broward County homeowners have applied for portability savings, and Crist said he's working to find out how many have applied statewide.

"It's all because of you," Crist said from the Capitol steps, adding that Florida needs Realtors now more than ever as the state's population has topped 19 million.

Atwater hits airwaves in reelection fight

State Sen. Jeff Atwater's reelection battle against Skip Campbell has hit the television airwaves with an ad that targets the state's insurance companies.

In the ad, called "Holding Insurance Companies Accountable," Atwater, a North Palm Beach Republican whose district includes the northern part of Broward's east coast, talks about putting some of the state's insurance executives under oath during state Senate hearings earlier this year.

"We learned they used loopholes to skirt the law," Atwater says in the 30-second TV spot. "That's unacceptable. We were promised lower premiums....What they're doing is wrong, and these big insurance companies will be held accountable."

View the ad here.

So far, Atwater, who is set to become the next Senate President, has raised more than $1.1 million against Democratic challengers Robert Ostrov and Campbell, who ran a failed bid for Florida attorney general in 2006.

Senate 'invites' 5 insurance execs to come clean at hearing

The Senate committee looking into the state's property insurance crisis has called its first meeting for Tuesday, Jan. 22 and has "invited" executives from five companies to testify under oath about their pricing practices and profits at two meetings in February.

The January meeting will hear from J. Robert Hunter, actuary and consumer advocate, and from the Office of Insurance Regulation. Here's the letter from Sens Jeff Atwater and Steve Gellr, co=chairman of the committee: Download invitation_letter.doc

Here's the list of execs: Download invitelettercontacts.doc

Crist calls Allstate's performance at hearing 'arrogant'

Gov. Charlie Crist Tuesday called the appearance of Allstate executives at Tuesday's hearing "stunningly arrogant'' and vowed to use the heft of his legal office to help get more information.

State insurance regulators abruptly ended a hearing with Allstate after just two hours when the company appeared to deliberately avoid questions by presenting attorneys who couldn't answer them and said they didn't bring with them the documents required by a state subpoena relating to its property coverage rates.

"I find that stunningly arrogant,'' Crist told reporters. "I can't believe they would actually do that and if there's anything we can do from the governor's office that can help...we stand at the ready to do.''

Insurance Commissioner Kevin McCarty said he will order Allstate back later to answer the questions he and other regulators posed. Meanwhile, the company faces severe sanctions, McCarty said, including the possibility of losing its license in Florida, if it fails to comply again.

''What have you got to hide?'' McCarty asked Allstate as he opened the hearing, which had been scheduled for two days.

Allstate announced at the hearing that it planned to drop its request for double-digit rate increases but that did not satisfy McCarty or Sen. Jeff Atwater, R-North Palm Beach, who is the chair of a Senate panel to investigating the property insurance situation and exploring why only half of the companies operating in Florida have complied with the 2007 law.

Crist has asked three trial lawyers to consider filing a class action lawsuit against the property insurance industry and said Tuesday he will meet with them soon to hear "what they think is an appropriate legal action.''

Meanwhile, House Democratic Leader Dan Gelber said in a letter to House Insurance Committee chairman Ron Reagan that the hearing was "extremelly disappointing" and he chided House Republicans for failing to join the Senate Republicans and the governor in their aggressive enforcement of the law. Download gelber_letter.pdf

Crist seeks tobacco-style lawsuit against insurance firms

     Railing against the failure of the  insurance industry to pass on savings to Floridians after
the state took on more of the risk, Gov. Charlie Crist has appointed three high-powered lawyers to file a class-action suit against the industry on behalf of state residents.

     "I'm increasingly concerned they are potentially violating the new law," Crist said in an interview with The Miami Herald on Tuesday. "Common sense would dictate to you that if they are not passing on the savings to the customer, they are violating the law that says they must pass on the savings to the customer."

     Crist said his legal office has engaged the help of Roberto Martinez, a former U.S. attorney from Miami who chaired Crist's transition team; Dexter Douglass, 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 and Stewart, the former firm of Crist's chief of staff, George LeMieux. The lawyers will work at no cost to the state, he said.

     Martinez said his firm has been asked "to look at information relating to the rates being charged for property insurance in the State of Florida to determine whether there is the basis for legal action'' but he couldn't comment further.

        The lawyers are reviewing the financial documents the industry filed under oath with the Florida Office of Insurance Regulation and will file a lawsuit against them ‘‘as soon as possible," Crist said.

        "I don't know how long that process is going to take," the governor said. "The idea is to get the
people's money back."

        He said many companies have lowered their rates ‘‘but those that have not should be accountable and there are consequences to violating the law if we can show that they have and I believe that they have."

        Since the law was passed in January, several major national companies, such as Allstate and Nationwide, lowered their rates very little or asked for a rate increase.

   Smaller companies, many of them Florida-based, had the largest decreases. State Farm, the largest insurer in the state, agreed to a 9 percent decrease and Citizens Property Insurance, the state-run insurer which didn't have to reduce rates, lowered its rates as well.
   

Crist: "We sure are tracking them down."

Standing side by side with Insurance Commissioner Kevin McCarty, Gov. Charlie Crist announced that that Florida regulators have issued subpoenas to Allstate and its sister companies to see whether or not they have failed to comply with Florida's insurance reform laws.

"We have significant reason to believe that some insurance companies are violating Florida law,'' said Crist.

Regulators not only want documents from Allstate regarding their recent rate filings, but also their dealings with rating agencies, companies that do storm modeling, and trade associations, including the Florida Insurance Council and the Property Casualty Insurers Association of America. Read more here.

Crist and McCarty stopped short of accusing anyone of collusion, but said they were suspicious about what was happening with large insurers such as Allstate. "We're not accusing anyone of anything, but we sure are tracking them down,'' said Crist.

WSJ blasts Crist for "socializing" insurance

In a predictable editorial today, the Wall Street Journal accuses Gov. Charlie Crist for having "socialized" the state's hurricane insurance market. It blasts the idea of U.S. Rep. Ron Klein's bill to allow the federal government to issue below-market loans to state-run insurers, like Florida's. It notes, as the governor has repeatedly, that business for many insurers and re-insurers is "booming.''

But the WSJ editorial writers argue that if the insurance market is working, "Florida's governor simply didn't like the price of private hurricane coverage.'' Download the_politics_of_disaster.doc

Voters see insurance as biggest cloud over sunshine state

A new poll by the Florida Education Association, the state teacher's union, could shed some light for Gov. Charlie Crist and lawmakers as they move ahead with plans to cut the budget this month and revamp the property tax amendment thrown off the January ballot. It's conclusion: it's also about insurance, stupid.

The poll found that when voters were asked which was more important, lowering homeowners insurance or cutting property taxes, 50 percent cited lowering insurance while 37 percent choose cutting property taxes.  No surprise, given the sponsors, the poll found that the same voters want more education spending. Download fea_poll.doc

Other results from the poll:

• 50 percent said funding for public education should be increased while 62 percent said spending on education should be increased.
• 60 percent believe that if the legislature's proposed amendment is put on the ballot in January, it will lead to budget cuts.
• 40 percent of respondents say they think Florida residents pay more taxes than people in other states, while 44 percent believe they pay less.
• 54 percent oppose eliminating the entire property tax structure and increasing the sales tax by 2.5 percent, as supported by House Speaker Marco Rubio, while 38 percent favor this approach.
• 57 percent favor increasing gambling revenue by allowing slot machines at race tracks and additional casinos, while 39 percent oppose.
• 45 percent support collecting sales tax on things bought and sold on the Internet, while 47 percent oppose.
• 75 percent of respondents gave the Florida Legislature “poor” or “not so good” ratings for its efforts in lowering homeowners insurance rates.

The FEA poll was conducted September 24-27 by Hamilton Campaigns in a telephone survey of 800 likely voters statewide. The margin of error for a sample this size, is plus or minus 3.5 percentage points.

Sink to meet with Lloyds of London on cat fund

Chief Financial Officer Alex Sink said Wednesday she will travel to Britain in November to meet with Lloyds of London to discuss alternative funding for the state's catastrophe fund. In a meeting with Gov. Charlie Crist Wednesday, she said they both agreed that "we put the state at risk for $28 billion and it looks like the insurance companies haven't come through with a lot of cost savings so maybe we don't need to put up the $28 billion.''

"What the legislature giveth it can taketh away and if the insurance companies don't appreciate our help maybe we don't appreciate them so much,'' Crist said. "That's a great idea.''

Sink will also meet with the British government to discuss "the impacts of climate on the financial market'' and investment. She asked to bring along the governor's top climate change advisor, lawyer Chris Kise.

"I'm so glad that you're doing what you're doing. I think it's fantastic,'' she said of the governor's climate change initiative.

Martinez's Cat Fund bill passes committee

It's far from the promise of a national catastropic fund, but a bill by Florida Republican Sen. Mel Martinez to form a commission on natural catastrophe risk management and insurance passed the Senate Banking Committee by a unanimous vote today.

"Congress needs to tackle the complicated issues of how the nation responds to an pays for natural disasters,'' Martinez said in a statement. "The product of this commission will set the stage for that debate.''

The proposed commission will be made of experts in insurance, emergency managment, structural engineering and environmental issues. The measure passed with an agreement to attach the commission language to the National Flood Insurance Program bill reauthorization that is expected for debate on the Senate floor this fall, Martinez said.

Property Insurance Wars: Part One

Declaring that "the property insurance wars have commenced,'' House Democratic Leader Dan Gelber today asked the governor to add property insurance to the call of the September special session on budget cuts.

He used the letter to renew his call for a Cabinet-level review authority for changes in insurance market conditions and recommended that lawmakers do the following:

• Authorize the Cat Fund to sell reinsurance at the remote areas of risk the companies are now insuring at a price range that is between actuarial cost and market.
• Prohibit insurance companies from buying this type of additional reinsurance from their parent company.
• Allow companies to buy this additional reinsurance from the private market, but prohibit passing on to consumers any more than the price the Cat Fund charges.

Read Gelber's letter here: Download property_insurance_to_special_session_c_letter_to_gov.pdf  Here is the Democratic plan for a Rate Reduction Authority: Download Democratic_caucus_hurricane_insurance_reform_package.pdf

Crist lashes out at insurance industry

Gov. Charlie Crist today suggested that insurance companies may be working in concert together to thwart insurance reforms passed last January and he said he's ordered lawyers in the governor's office to investigate whether or not that could be happening.

Insurance Commissioner Kevin McCarty also expressed frustration at the fact that companies are not filing rate decreases as was originally forecast by analysts. McCarty said his office intended to vigorously examine all rate filings - pointing out for example that the Office of Insurance Regulation on Monday had directed State Farm to file new filings that show an additional four to five percent decrease on top of the 7 percent decrease the company showed. McCarty also said that OIR has sent out subpoenas to State Farm executives asking them to show up at a hearing to explain why they decided to drop 50,000 coastal policyholders.

But Chief Financial Officer Alex Sink told Crist and her fellow Cabinet members that if insurance companies do not pass on savings to consumers as predicted then the Legislature should go back and remove the extra risk in the Hurricane Catastrophe Fund that the state assumed as a way to lower rates. Sink also said she wants to question the experts hired by OIR and the Legislature who had predicted the average 24-26 percent rate decrease in the first place.

The original property tax reform crew weighs in

Floridians for Property Tax Reform have taken a jab at Not Good Enough Florida, the group put together by a West Palm Beach radio host to oppose the Jan. 29th constitutional amendment on property taxes. Joe Raineri, the head of the group, maintains the savings in the amendment aren't enough and says he prefers the original plan by House Speaker Marco Rubio to raise the state sales tax and eliminate property taxes on all homestead property.

Brett Doster of Floridians for Property Tax Reform said Thursday that "any attempt" to encourage Floridians to vote against the amendment _ which would create a supersized homestead exemption _ is wrong and that the constitutional amendment is a "good start to a process that could take a couple of years to complete."

Added Doster: "If I won the million dollar lottery, I’m not sure that I would complain that it wasn’t the five million dollar lottery."

Legislators backtrack on insurance and property tax reforms

This of course seems to be a seasonal event. Legislators come to Tallahassee, vote for a series of bills, proclaim their worthiness, and then....go home and complain about it.

Yesterday legislators who represent Manatee County acknowledged that what has happened on property taxes and insurance hasn't worked out like they had hoped. Rep. Ron Reagan, a Bradenton Republican, said the insurance reforms passed earlier this year were supposed to be a "home run" but "in my opinion we hit a single."

Sen. Michael Bennett, a Bradenton Republican, went so far as to say insurance companies lied when they promised lower rates in exchange for the state assuming more risk in the hurricane catastrophe fund. Both Bennett and Republican blamed leadership in the House and Senate for not pushing ahead with a larger tax cut plan. More here.

Gelber snaps back that insurance rates need more work

House Democratic Leader Dan Gelber wasted no time commending the governor for setting up the insurance comparision web site Tuesday. He then stepped up the criticism of the insurance situation in a statement, resurrecting the "Storming Mad" line of the 2006 election season:

“The Legislature finally took a step in the right direction during the January special session in reforming our state’s property insurance market. The work we did during special session was a welcomed first step, but we have much more to do.  Too many Floridians are still feeling victimized by out of control insurance premiums. Unfortunately, during this past legislative session, we did nothing to address long-term reforms for policyholders insured through the private market. The Legislature also did very little to address property insurance relief for our state’s small businesses.

“We have a long road ahead if we intend to adopt long-term solutions that will deliver true rate relief to our constituents. The bottom line is that Floridians are still, rightfully, storming mad.”

Crist admits insurance rates haven't dropped enough

Florida's insurance rates "have not come down as much as I would like and the legislature would like,'' Gov. Charlie Crist said Tuesday. But, he said, they are lower than they would have been had the legislature not acted in special session in January. "Forever in Florida, it seems like rates would only go up..rates for the first time actually are coming down. Would I like them to come down more? You bet I would.''

Crist blamed the industry for overpromising and underdelivering on rates. "This has not been easy and the industry continues to resist,'' he said. "We need to continue to push the industry. We need to continue to hold their feet to the fire."

But the governor expressed no regrets that the state-run insurance company, Citizens Property Insurance, now carries so much risk  that it is insuring more than half of Florida's property insurance liability.

Meanwhile, homeowners now have a place to see compare average insurance prices in their home towns to see if there is a way to find a better deal. The web site, shopandcomparerates.com, is designed to "empower the consumer" said Crist when he made the announcement on Tuesday. It allows homeowners to see the rates offered in their community by 25 companies, including Citizens. "An informed consumer is a powerful thing,'' he said.

House asks for deeper prop tax cuts, Senate warns: they're not kidding

House negotiators agreed Wednesday with the Senate request that they first focus on a property tax cut plan that can be enacted immediately, rather than a constitutional amendment that must go before voters. But, in making the offer to Senate conferees, the House increased the difference between the two chambers, instead of bringing them closer.

Rep. Dean Cannon, a Winter Park Republican, said the House now wants a tax cut of $47 billion cut over five years instead of the $44 billion previously offered. The Senate had raised its tax cut on Tuesday from $12.3 billion to $15 billion to get closer to the House.

"We'll see your tax cut and raise you,'' joked Sen. Steve Geller, the Senate Democratic leader from Cooper City.  "I'm not sure it's progress."

The House proposal also cuts to hospital districts, children's services council ans water management districts, which previously had been exempt from the tax roll cuts. The only thing protected from cuts continue to be school districts.

The Senate negotiators then met, as local government lobbyists watched. First, they called the House bluff: "There's no one in this Capitol that believes that anyone could take this cut and continue to operate,'' said Sen. Dan Webster, the Senate Republican leader from Winter Garden. By offering such a deep cut, it inevitably forces the debate to turn to raising sales taxes to replace some of the cut, he said. "They get to the tax swap a different way. They haven't backed down.''

Next, they cut to the core of the debate: Sen. Ronda Storms, a Brandon Republican, she said will urge her "good, conservative government friends in the House'' to begin a serious discussion about what the "legitimate purpose of government should be."

The House "needs to answer which of these line items is not a legitimate purpose of government because you can't do it all,'' Storms said. She also chided local government lobbyists who have suggested that sacred cows would be slaughtered by the budget cuts and said they had lost credibility by "engaging in fear mongering, in chumming the waters and not being intellectually honest."

Finally, Senators issued a warning to the lobbyists for local government sitting in the audience: "My advice is, start running these numbers and start telling us what these impacts would be,'' said Sen. Mike Haridpolos, the Melbourne Republican who chairs the Senate negotiating team. He called the House's persistence "serious'' and urged local governments to make the case why the cuts shouldn't happen. "This might be one of your last shots at it,'' he said.

Crist surprises committee to lobby Citizens bill

Gov. Charlie Crist made a surprise appearance Monday to the Senate Banking and Insurance Committee to continue to push for the bill which opens Citizens Property Insurance to more homeowners and attempts to protect the state-run company's tax-exempt status.

The bill won unanimous approval by the committee, despite appeals from insurance lobbyists that it allows Citizens' to further encroach on the private market.

The governor commended the legislature for its work on insurance and then made the following pitch: "It gives more power back to the people for them to have the opportunity for Citizens, and other competition, as a result of this good legislation to be able to get lower rates,'' he said.

He applauded the committee's substitute bill, which lowers the threshold by which new customers can get Citizens' coverage. Under the change, a homeowner may get Citizens coverage if the cost from a private company is 15 percent higher than Citizens' rates.

"It does turn things on its head, and that's the whole idea,'' Crist said. He noted that the legislation helps Citizens maintain its tax exempt status. "It's a great piece of legislation and I urge your favorable vote.'' 

Committee hears one prop tax bill, as Rubio urges lobbyists to help him with the other one

House Speaker Marco Rubio held a 20-minute listen-only call to lobbyists and GOP supporters this morning in which he outlined "our plan" on property taxes. His focus was the constitutional amendment to swap homestead property taxes with 2.5 cent increase in the state sales tax. There was not a single mention of the bill being discussed at the same time by the House Policy and Budget Committee that forces local governments to rollback $5.8 billion from their budget to provide property tax relief.

It is becoming increasingly clear that the bill expected to be approved by the committee today is a trial run, and not the one Rubio and House leaders want to see actually move through the chamber.

Rubio laid out the details of the House Republican plan for a constitutional amendment in what he called "telephonic town hall meeting." Invitations to the call had been sent out to lobbyists, GOP supporters and anyone who was interested by the Florida Republican Party.  The speaker has approached the issue like a campaign and the party has staff dedicated exclusively to helping the speaker push the GOP version of the property tax plan. They have set up a web site http://www.nomorepropertytax.com/ and Rubio urged people to sign the petition on the web site that supports the House GOP plan.

By Thursday afternoon, more than 12,000 people had signed the petition. Twenty minutes after Rubio's call, there 14,858 signatures.

Ron Klein is sworn, and he swears to tout national cat fund

U.S. Rep. Ron Klein,  who represents Broward and Palm Beach but none of Miami-Dade, nevertheless attended today's local swearing-in ceremony in downtown MIami.

Between ceremonies in Washington and in the two counties he represents, it was his fourth time taking the oath of office.

"I feel sworn,'' joked Klein, who said he was invited by U.S. Rep. Ileana Ros-Lehtinen because he is a member of the South Florida delegation.

Klein, a former state senator, said he was disappointed that the insurance legislation signed in Tallahassee last week did not go far enough in forcing companies to justify rate increase or stopping them from cherrypicking customers.

"The Legislature put its big toe in the water, but we've got a ways to go,'' Klein said.

Klein and other members of the Florida delegation are pushing a national catastrophic insurance fund, an idea that has wielded about as much appeal in Washington as a blizzard on inauguration day.

"The only real, long-term solution is for the government to step in,'' said U.S. Rep. Mario Diaz-Balart.

House unveils insurance plan

House leaders today released their six bills to address the state's insurance crisis, including a plan to allow private insurers lower state-backed reinsurance as long as they pass on at least 25 percent in savings to consumers. Here is a summary of what's to come.