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Insurance Bill Misrepresented
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Published: June 25, 2008
Walter Dartland of the Consumer Federation (Other Views, June 10) expressed his support for Gov. Charlie Crist's veto of the funding for the highly successful Insurance Capital Build-Up Incentive Program reauthorized by the Florida Legislature a few weeks ago.
Dartland is within his rights to support or oppose the program and or its funding source, but I must take issue with the way he expressed his view. He insinuated that the program's funding was "quietly slipped in" the budget, further insinuating that the funding provides insurance companies with a free gift, writing, "insurance companies now are sitting on millions of taxpayer dollars."
Both of his insinuations are wrong. First of all, nothing was sneaked in the budget. Funding for the program was duly debated in both House and Senate Committee meetings weeks before the final budget was passed by lawmakers. In fact, it was openly proposed and debated in a House bill brought before several committees early in session and, was agreed to by Sen. Jeff Atwater as early as April 8 as he was developing a Senate companion bill.
As to the insinuations that the money is some gift to insurance companies, that too is completely false. The funds are a loan that companies must pay back with interest. The benefit to consumers is that the loans are responsible for some two-dozen new start-up companies forming in Florida to offer homeowners more choices from which to purchase homeowners' insurance.
Even Gov. Crist acknowledged that the build-up program is a "well intended" program, "having the net effect of removing 200,000 policies from the Citizens Property Insurance Corporation" and one that has kept "an additional estimated 480,000 out of Citizens."
The Citizens board of directors has likewise noted the success of the program. Citizens growth never reached the high numbers that were anticipated and the reason is that the incentive program has allowed these home-grown companies to form and issue policies that otherwise would have been forced into Citizens.
During a tough budget year, lawmakers sought alternative funding sources for many worthwhile programs, including the Insurance Capital Build-Up Incentive Program.
The governor disagreed with using Citizens surplus as the alternative funding source to continue the program. That disagreement is worthy of healthy debate, but too many policymakers choose to demonize the industry to draw attention away from their own unwillingness to truthfully confront the real issue: ensuring the claims-paying ability of the Florida Hurricane Catastrophe Fund, and the claims-paying ability of the government-run insurer, Citizens Property Insurance Corp.
Guy Marvin is president of the Florida Insurance Council.
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