Lawmakers 'feeling around in the dark'?

As legislators grapple with the insurance crisis, many say they’re struggling to get the data they need to make wise decisions.

Published January 20, 2007

TALLAHASSEE — The question from the Florida Senate floor seemed simple enough.

Before Sen. Bill Posey, R-Rockledge, voted on a plan to require insurers to write any line of insurance in Florida that they write in any other state, he wanted to know its impact. How many private companies might be added to the state’s property insurance market? Or how many might be driven away?

The plan’s sponsor, Sen. Mike Fasano, R-New Port Richey, answered that he didn’t know.

That scenario has been a familiar one in the past week. Time and again during the past five days, as lawmakers rushed to keep promises to do something about rising insurance premiums, they found themselves lacking reliable data about their plans’ impact.

Gov. Charlie Crist continues to insist the Legislature provide at least a 25 percent cut in insurance premiums, but lawmakers are struggling to find a way to do it.

“I’m so frustrated by the lack of information available to us,” an exasperated Rep. Jack Seiler, D-Wilton Manors, said Friday night after negotiations between the House and Senate nearly broke down.

“We’re making policy like we’re feeling around in the dark. 'Oh geez! I think over here is the right number for this and I think over here is the right number for that,’ ” Seiler said.

Among the most obvious uncertainties:

•The state-backed insurer of last resort, Citizens Property Insurance Corp., initially estimated that if lawmakers would allow it to write policies other than   just windstorm, premiums could shrink as much as 25 percent. On Friday, the company’s actuary released a lower figure of 10 percent.

• At midweek, a House plan crafted by Seiler to expand Florida’s reinsurance fund projected an average savings of 65 percent for windstorm coverage. Less than 24 hours later, state regulators retracted those numbers and said the figure was more like 21 percent.

• House members didn’t realize until Thursday that their reinsurance expansion plan, if mandated for all private insurers, could actually raise rates for 1-million customers of the state’s largest private insurer.
State Farm Florida said it buys cheaper reinsurance from its parent company. The revelation prompted the House to scramble to find ways — possibly through reducing other reinsurance costs for State Farm — to assure the company’s rates fall for consumers.

• And a Senate reinsurance plan, one that would largely leave the state on the hook for any hurricane damage between $26-billion and $40-billion, has changed almost daily. Estimates of customers’ savings on their windstorm premiums have varied from 10 percent to 48 percent.

Still unclear is what effect such a potential liability might have on the state’s bond rating — which dictates how much the state pays to borrow money for everything from schools to roads.

The uncertainty has left lawmakers, even those most committed to lowering insurance premiums, shaking their heads.

“No one seems to have the data we want,” said Posey, who is co-chairman of the joint legislative committee negotiating the final insurance package.

“We have bipartisan frustration with numbers,” Seiler quipped.

Crist, who campaigned on promises of lower insurance premiums, is largely unfazed, at least publicly, by the shortage of hard data.

And he says he’s skeptical of the numbers made available by the industry.

“Do we believe the insurance industry? Are we at that point in the debate?” he said Friday in an interview. “It’s been shown their models are deceitful, that they have gouged our citizens, that they have taken advantage of Floridians, that they didn’t give any refund when we didn’t have storms. … So when they tell you what they will or will not do, I really kind of don’t listen very carefully to the insurance industry.”

The anti-industry rhetoric has left insurance lobbyists chafed, but not intimidated. And they are far from being out of the loop. Lawmakers frequently summon them for feedback on ideas.

So far no one is predicting that the lack of information will scuttle the special session that ends Monday — even if the outcomes of legislation remain unclear.

“I didn’t run (in the November election) but there are those here who did,” said Sen. J.D. Alexander, R-Lake Wales, “And they heard very clearly, we’ve got to get something done.”

Joni James can be reached at (850) 224-7263 or jjames@sptimes.com.