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Poll: Floridians want more property insurance regulation, not less

By Julie Patel, Sun-Sentinel

May 25, 2011

Most Floridians want more property insurance regulation, not less, and they report it's getting more expensive, according to a poll released today by Quinnipiac University in Connecticut.

Gov. Rick Scott signed sweeping property insurance legislation this month that he says will lift "burdensome regulations" to draw new insurers to the state. The bill allows insurers to raise premiums up to 15 percent a year for reinsurance, on top of regular rate hikes.

The Quinnipiac poll of roughly 1,200 registered voters surveyed by phone in May also found that most Floridians don't approve of the job that Scott and state legislators are doing. More results:

63 percent reported property insurance is becoming harder to obtain. The new law aims to address the issue by making the state more attractive to insurers.

74 percent said property insurance is getting more expensive.

59 percent said more government regulation of property insurance is needed. A higher portion, 67 percent, of Southeast Floridians favored more regulation.

"Whether the new law changes public attitudes about insurance in Florida, only time will tell, but there is no doubt that the electorate sees a crying need for something to make getting and paying for property insurance in Florida less onerous," Peter Brown, assistant director of the Quinnipiac University Polling Institute, said in a statement.

Sean Shaw, a former state consumer advocate who formed Policyholders of Florida, said the poll shows Floridians reject "giveaways" to the insurance industry in the bill. "Most Floridians aren't worth $300 million, which makes it a little harder to swallow higher insurance bills and less insurer accountability," Shaw wrote in a statement.

Insurance industry representatives have downplayed the impact of the bill, especially the part on reinsurance, catastrophe insurance for insurers. "If reinsurance rates do not rise, then there is no change at all," wrote Lynne McChristian, a spokeswoman for the Insurance Information Institute, wrote in a blog post.

Insurance company and industry experts have predicted reinsurance rates will rise this year, dramatically in some cases.

COMMENTS:

With all due respect, Julie, it is misleading to say that the recently enacted insurance legislation "allows insurers to raise premiums up to 15 percent a year for reinsurance, on top of regular rate hikes." The full cost of reinsurance has always been included in insurance company's rate filings, as permitted by Florida law, along with all other expenses. Filing a separate proposed rate increase based on an increase in the cost of reinsurance cannot result in any greater increase in rates than if it was included in the insurer's annual rate filing. It is not "on top" of regular rates. It is only a difference in the timing of when an insurer will file for a rate increase after finding out that its reinsurance costs for an upcoming hurricane season are going up. Furthermore, this is not a new law. The bill simply changed current law from allowing an expedited rate increase of up to 10% due to increased reinsurance costs to an increase of up to 15%. Finally, any increase must be approved by the Office of Insurance Regulation based on the insurer filing their reinsurance contracts and other evidence of the expenses incurred.

Posted by: R. Terry Butler, Esq., Florida's Insurance Consumer Advocate | May 26, 2011 4:44 PM

Hi Terry.
Thanks for weighing in. As you probably know, few insurers used the expedited rate hike provision because it barred companies from filing for other, regular (i.e. non-reinsurance related) rate hikes within the same year. But that has changed under the law this year.
Our job is to translate information as clearly, succinctly and directly as possible. Sometimes that means leaving out detailed explanations in favor of capturing the essence of an issue that impacts readers. Does that make sense? That said, I'm sure some readers will find useful the details you provide and that I linked to from my blog, both from I.I.I. and from our previous coverage:
"A provision to effectively allow insurers to raise premiums by up to 15 percent a year for reinsurance costs drew the most fire in recent weeks. In 2009, the legislature allowed quicker approval of rate hikes for costs related to reinsurance, or catastrophe insurance for insurers, so long as premiums didn’t increase by more than 10 percent. The new law this year raises the cap and allows insurers to ask for another rate hike – using the normal oversight process – during the same year. Insurers are also allowed to charge a profit margin on the reinsurance costs, though they’re shifting the risk to reinsurance companies.
Monte Stevens, a lobbyist for the Office of Insurance Regulation, said regulators could still decide the profit margins requested are too high, even under the quicker rate review."
Hope that helps.
Julie

Posted by: Julie Patel | May 26, 2011 5:13 PM

Thanks, Julie.
In response to your question, yes that makes sense and I understand the difficulty in being clear and succint in explaining complex insurance laws. That is why I thought it would be a good idea to expound on the 15% issue. Some articles and commentators have given consumers the impression that the Legislature adopted an automatic 15% increase in homeowners' insurance premiums for everyone. As you know, that is not the case.
Terry

Posted by: R. Terry Butler, Esq., Florida's Insurance Consumer Advocate | May 27, 2011 1:17 PM