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State Farm says it might stay if Crist signs deregulation bill

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By CATHERINE WHITTENBURG | The Tampa Tribune

Published: June 22, 2009

TALLAHASSEE - State Farm Florida has told Gov. Charlie Crist that the property insurer might stay in Florida if the governor signs a bill deregulating its rates.

Jim Thompson, chief executive officer for State Farm Florida, said in a letter dated June 16 that the company "would be willing to re-consider its options" if Crist were to enact a bill that would allow national mega-insurers charge whatever they wish for property insurance in Florida.

State Farm Florida declared early this year that it was leaving Florida's property insurance market after regulators denied the company's request for a 47 percent rate increase. Critics have derided the proposal to deregulate rates as the "State Farm bill," though its sponsors, Rep. Bill Proctor, R-St. Augustine, and Sen. Mike Bennett, R-Bradenton, have denied they filed it on the insurer's behalf.

Thompson's letter makes no promises about staying in Florida but offers his strongest indication so far that the legislation might change the company's position.

Days after Thompson sent his letter, the AM Best Co. downgraded State Farm Florida from B+ (good) to B (fair).

Monday, Thompson said that would not affect the company's decision about staying in Florida. "The key to us is how the law will be interpreted and implemented by the Office of Insurance Regulation," he said.

Crist, who has made low property insurance rates a high priority, has been hinting for weeks about possibly vetoing the bill. Among those pushing him to reject it is the Florida Property & Casualty Association, an organization of Florida-based property insurers that would remain subject to state rate regulation. The industry group has complained that the law would create a "bifurcated" market that would harm consumers as well as smaller in-state insurance companies.

Asked about State Farm Florida's letter, Crist spokeswoman Erin Isaac said only that the governor "is in receipt of the letter and will act on 1171 by the June 27 deadline."

Reporter Catherine Dolinski can be reached at (850) 222-8382.

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