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Empty seats drive change in hearings

Consumers rarely show up at insurance rate hearings, so the state plans to move most of them to Tallahassee and put them on TV.

By TOM ZUCCO
Published July 15, 2006

The issue of affordable residential and commercial property insurance in Florida has sparked torrents of angry e-mails, petition drives and protest rallies.

But when it came time to voice those concerns directly to state regulators, the crowds stayed away.

Florida law requires a public hearing if an insurance company requests a rate hike of 15 percent or more. But at 23 of the 41 hearings held around the state since June of last year, no one from the public showed up. For all the remaining 18 rate hearings put together, a total of about 350 people found the time to attend.

So Florida Insurance Commissioner Kevin McCarty decided this week to try a new plan.

Beginning in August, the mandatory rate hearings will be held in Tallahassee unless the rate hike or the number of people affected is substantial. In that case, the hearings will be held in the areas most affected.

An example of the exception is Nationwide's recent request for a 71 percent average statewide increase. Those hearings will be held outside the capital.

Under the new format, the hearings will change from an open forum to one in which insurance company representatives, the state's insurance consumer advocate and anyone else will testify under oath.

The consumer advocate would also be able to question the insurer about its rate request.

The hearings will be broadcast over the Florida Channel, a public television station, and on the Florida Office of Insurance Regulation's Web site.

But not everyone is sold on the idea.

Critics of the old format said the hearings were poorly publicized, they were held in midmorning or early evening, times when many people were working, and they were little more than gripe sessions.

"Going to a hearing and complaining didn't really serve a useful purpose," said Bill Newton, director of the Florida Consumer Action Network, who called the change a step in the right direction.

"We want a real, independent consumer advocate, to have our own economists and attorneys there, and cross-examine the companies, just like in utility rate increase hearings," Newton said.

"That would be real citizens' participation, and we still don't have the right to do that."

Hiring experts and making regular trips to Tallahassee costs money, Newton said. But having a consumer advocate with no ties to the state is vital.

The state's current insurance consumer advocate, Steve Burgess, was appointed by Florida Chief Financial Officer Tom Gallagher.

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247).

[Last modified July 15, 2006, 00:28:47]