Governor Charlie Crist will certainly be asking himself the question whether the property insurance legislation before him is bad for average Florida insurance consumers. Yesterday’s afternoon post, Pay Higher Premiums and Get Less Coverage Legislation — Can Anybody Explain Why This is Good for Floridians? provided a simple explanation of why many are calling for Governor Crist to veto this legislation. The analysis is not easy because the proposed law was rolled into one massive piece of legislation, some very bad and some good. The media is starting to pick up the overall aspects of the proposed law.

Julie Patel, of the Sun Sentinel covers the “insurance beat” and has a good understanding of the issues because of her experience reporting on insurance related issues. Her blog had a recent post, Bill Allowing Insurers to Raise Rates Likely to Get Vetoed by Crist. She noted:

Gov. Charlie Crist said he’s leaning toward vetoing a property insurance bill that would, among other things, reduce costs for insurers and make it easier for them to raise rates.

"To their great credit, they’re very effective advocates," Crist said of insurers. "They play on fear a lot and talk about, ‘It’s going to be a terrible day.’"

I agree. Indeed, I noted the effective control the insurance lobby has in Tallahassee over a year ago in Insurance Lobbyists are Winning the Consumer Protection Battle, and more recently in The Florida Insurance Lobby Currently Controls the Rhetoric Regarding Public Adjusting in Florida. Since much of what the insurance industry is paying for with these lobbyists are laws that harm their own consumers, even the pro-insurance industry press has questioned whether this is ethical– as noted in The Ethics of Insurance Industry Lobbying is Raised in the Insurance Industry Press . In effect, the insurers are using premiums from their own customers to pay lobbyists to promote higher rates and fewer benefits for their customers. One aspect of the proposed legislation does exactly this. Now that the bill has hit the governor’s desk, everybody can bet that these savvy insurance lobbyists are trying every trick in the book to suggest that this bad legislation is helpful to consumers. The media propaganda has started in earnest with “Florida Insurers Say Omnibus Property Bill Is Consumer Friendly.” After spending all that money with the legislative process, those lobbyists will have their public relation types doing everything they can to make this bad bill look as good as possible.

Still, in Five Bills Gov. Crist Should Veto, the St. Petersburg Times editorial board noted:

Property insurance (SB 2044) This bill is a mixture of bad and good, the latter being that it would require insurers to have more capital. But it broadens the ability of insurers to get expedited review for rate increases of up to 10 percent to cover reinsurance and inflation costs. The window for these types of increases, which are routinely approved, is plenty wide enough now.

The legislation also unfairly tinkers with mitigation discounts. It penalizes both those homeowners who invested in storm shutters and other improvements and homeowners who did not — lessening the cost of mitigation discounts to insurers and allowing them to transfer some of the remaining costs to other homeowners.

Indeed, I was at the legislative hearing regarding the discounts, where Senator Mike Fasano seemed very upset that Florida, after promising insurance rate discounts and people spent money on mitigation measures in reliance on that promise, would retroactively break that promise.

There are more aspects of the long bill which I will write about. I did promise in yesterday’s post about commenting about one aspect of it involving religion, and here it is:

Section 5. Paragraph (n) is added to subsection (2) of section 626.221, Florida Statutes, to read:

626.221 Examination requirement; exemptions.—

(2) However, no such examination shall be necessary in any of the following cases:

(n) An applicant for license as a customer representative with respect to property insurance who has earned the designation of Certified Insurance Representative (CIR) from the National Association of Christian Catastrophe Insurance  Adjusters.

While a Christian, I believe in separation of church and state. Nobody I know in the insurance adjusting community has ever opined that membership in this particular organization renders an adjuster more educated, experienced or qualified to do the job. The qualifications for membership in the Christian one, the National Association of Christian Catastrophe Insurance Adjusters, certainly do not meet the level of experience and knowledge required of a CPCU or AIC in adjusting.

I wonder what my Jewish adjuster friends think of it?