Emergency order freezes home insurance rates

[Aquawind]

Emergency order freezes home insurance rates
By Paige St. John
news-press.com Tallahassee bureau
Originally posted on January 30, 2007

TALLAHASSEE — Florida today adopted an emergency order freezing home insurance rates and preventing policy cancellations and non-renewals.

The order was sought by Gov. Charlie Crist, who contended insurers would attempt to thwart legislation he signed last week that tightens regulation of state insurers while making the state's insurance pool, Citizens Property Insurance, competitive.

But Crist, who did not reveal the emergency order until Monday evening, faced a divided Cabinet. CFO Alex Sink expressed concern Florida may be overreaching, and end up damaging an already fragile insurance market.

"The industry does deserve a fair hearing," she said.

Crist rebutted efforts by both Sink and insurance industry lobbyists who turned out in full force this morning for the Cabinet meeting.

"We're talking about the Cabinet having the backbone to do what's right," he said, "to protect people from being gouged again."

Insurers are protesting most loudly at the freeze on policy cancellations and non-renewals, contending they need to adjust their books of business to balance capital requirements and hurricane exposure.

"The hurricanes have caused this pain and not the insurance companies," petitioned Mark Delegal, a lobbyist for both State Farm Florida and Nationwide.

Privately, Delegal confirmed State Farm had been contemplating non-renewal notices to some 40,000 coastal residents. Some of them would have been allowed back in the company under policies that did not include hurricane coverage.

The emergency order is effective 90 days, or until state regulators decide what kind of rate reductions to require insurers under the new law. Under that law, insurers face another freeze on policy.

http://news-press.com/apps/pbcs.dll/art ... 00013/1075