Imagine – all kinds of legislation, hand in hand with lobbying and political positioning, just in time for the start of hurricane season on June 1. A couple of recent news stories point out the possible direction that several key measures may be heading.
Is this a tell-tale indication of the current administration’s stand on federal programs for insurance? The Obama administration reportedly is taking a somewhat quiet but strong stand opposing federal wind insurance legislation that would permit homeowners to purchase wind coverage at actuarially set rates (in addition to the already debt-ridden federal national flood insurance program).
Meanwhile, consumer advocate and former insurance regulator J. Robert Hunter provided congressional testimony that the federal government should take over capital, surplus and solvency regulation of insurance, but should be coupled with removing the antitrust exemption enjoyed by the insurance industry. He also reconfirmed his opposition to a Federal Charter for insurance.
And now Florida’s insurance agents are unsure on which side their bread is buttered the best with SB 1171, the measure before Governor Crist that allows large insurers to raise premiums without the approval of the state regulator. Yesterday, the FAIA (Florida Association of Insurance Agents) declined to take an official position on whether Crist should sign the legislation. Backers of the bill say that it would allow policyholders to retain the familiarity of their insurance company, and that some people would rather “keep a well-capitalized insurer they know and pay a little more for it,” than change insurance companies. Sounds to me a little like the old adage of keeping your friends close but your enemies closer.
Question is, will State Farm leave Florida if the measure isn’t signed by Crist? We’ve just learned that State Farm and Florida insurance regulators have decided to continue negotiating over how the giant insurer can conduct an orderly withdrawal from Florida’s property insurance market, rather than proceeding to court.