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Politics

Crist pushes for larger role for Citizens

A bill makes it easier for Citizens to undercut private companies.

By JENNIFER LIBERTO
Published April 13, 2007

ADVERTISEMENT [AP photo] Gov. Charlie Crist speaks Thursday at a Step Up for Kids rally in Tallahassee.

TALLAHASSEE -- The governor who declared victory over boundless insurance premiums after January's special session may not be so satisfied with the new status quo after all.

On Thursday, Gov. Charlie Crist shed his hands-off leadership style and surprised lawmakers with an unannounced visit to a legislative committee meeting. It was his second surprise visit this week.

Both committees had one thing in common: On their agendas was a bill that would make it easier for state-run Citizens Property Insurance Corp. to undercut private companies and lure away homeowners with lower premiums.

"I came to thank the members for their support ... to give Citizens insurance the opportunity to compete so that we can get lower and lower rates for our people," Crist said Thursday morning after testifying before a House committee that voted 12-2 for his bill. "They still expect more and so do I."

Suddenly, this Citizens bill that neither chamber had time to consider in the first half of the session is moving briskly. The Senate leadership removed one of the bill's stops before a committee.

Yet the bill is drawing whispered criticisms from lawmakers because it pushes even further the "save now and pay later" philosophy adopted during that special session.

Even Chief Financial Officer Alex Sink said she is worried about parts of the bill.

"I'm just very concerned that we're about to make the state-run insurer the only insurer in Florida," Sink said after reviewing the bill.

Freeze on rates

The House and Senate bills would do the same thing: allow homeowners who are insured privately to move to Citizens if their insurance company is charging 15 percent more than Citizens would. Under current law, the one enacted just months ago, homeowners can jump to Citizens only if the premium difference is 25 percent higher.

The House version of the bill also would extend the current freeze on Citizens rates until January 1, 2009. Rates are currently capped at 2006 levels until next year.

Citizens rates are expected to increase when the freeze ends at the end of this year, in part to pay for discounts the company must, by law, offer to policyholders who harden their homes. Crist's staff says the idea behind extending the rate freeze is to give the other changes in insurance law that were made during the special session more time to work.

Sink says she is worried that such a delay would jeopardize the state-run insurer's ability to charge actuarial sound rates.

Crist said, "The people were very direct, and I'm glad they were, they said get those insurance premiums lower. I want to convey their will."

But Rep. Don Brown, R-DeFuniak Springs, one of the few lawmakers who would publicly criticize the bill, said the legislation increases the likelihood that all Floridians will have to pay to cover Citizens' debts in a hurricane season.

"Three out of every four people in Florida ought to be very concerned about it, because they're going to get the bill, despite the governor's best intentions," said Brown, who voted against Crist's bill, along with Rep. Dave Murzin, R-Pensacola.

'They do not sleep'

The bill also tries to protect Citizen's federal tax exempt status and resurrects old language the Legislature failed to pass during the special session that would prohibit the creation of Florida-only subsidiaries for insurance companies. It also would require parent companies to report their profits to the state.

Crist said that his recent, aggressive push for the legislation is not in response to criticisms from homeowners who say insurance rates haven't dropped enough.

"I want to continue to press and be vigilant, because the insurance industry lobby is extremely skilled and they do not sleep and they will try to come in through every crack or crevice they can find to get rates not to drop as much as they should and to turn around," Crist said. "And I want to be just as tenacious, if not more so."

[Last modified April 12, 2007, 22:46:12]