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Panel Confronts Insurance Industry

Tribune photo by COLIN HACKLEY

Sen. Steven Geller, D-Hallandale Beach, right, talks about a Senate Select Committee being formed to investigate why property insurance prices remain high, as Sens. Bill Posey, R-Rockledge, left, and Jeff Atwater, R-Palm Beach Gardens, listen Thursday during a news conference at the Capitol in Tallahassee.

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By BRENT KALLESTAD, The Associated Press

Published: January 11, 2008

Updated: 01/10/2008 10:11 pm

TALLAHASSEE - A special Senate panel threatened Thursday to subpoena leading insurance industry executives to explain why some Florida consumers have not seen savings on their property insurance bills.

The lawmakers are frustrated at the delay in getting savings back to the state's consumers despite record $3.4 billion industry profit in Florida last year - in part as a result of a second summer without a major hurricane.

"It's time for the fork to meet the grits," said Sen. Bill Posey, the Rockledge Republican who chairs the Senate Banking and Insurance Committee. "We need to make sure this stuff is rolled back as far as it needs to be."

Posey spoke at a news conference announcing the special Senate panel that will include half of the Senate's 40 members. It will be co-chaired by Sens. Jeff Atwater, R-North Palm Beach, and Steve Geller, D-Cooper City. Lawmakers said they intended to put industry executives under oath during testimony before the panel.

The Legislature passed a measure (HB 1A) in special session a year ago to provide relief to the industry with an eye toward lowering premiums. Among other measures, the bill increased the state's Hurricane Catastrophe Fund to provide private insurers with low-cost reinsurance.
Industry spokesman Sam Miller said the Senate's threat of subpoenaing insurance executives is premature.

"It is important to note that rate increases sought by some carriers have not taken effect," said Miller, vice president of the Florida Insurance Council, which represents some 200 companies doing business in Florida.

Nearly a fifth of policy owners in Florida - roughly 700,000 consumers - have benefited from an average savings of 22 percent. An additional 40 percent of policyholders are awaiting the results on pending rate requests. Companies that write the remaining policies have found their rates rejected. Those companies will have to go to arbitration or court to settle their cases.

However, Gov. Charlie Crist and legislators are getting antsy with constituents asking questions about when they'll see relief.

"It is in my opinion the biggest issue faced in the state," Geller said. "This is contributing to the substantial economic slowdown in Florida."
Industry spokesman William Stander said Thursday that lawmakers and regulators are off target in their quest for answers. Stander, assistant vice president and regional manager for the Property Casualty Insurers Association of America, said the insurance industry and state need to work together.

Stander said 80 percent of all the insured property in Florida worth nearly $2 trillion is vulnerable to storm losses and that the figure is growing with continued development in the state's highest risk areas.

"All the hearings in the world won't change that fact," Stander said.

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