The Senator is Right

Plan to allow 25 percent insurance rate hike without state OK draws fire

BOCA RATON, Fla. -- Feb. 21, 2006 -- Several weeks ago, Florida House Republicans announced legislation aimed at improving the insurance market in Florida, with one provision aimed at allowing insurance companies to raise premiums by up to 25 percent on average without regulatory approval -- which supporters say would help make up for unrealistically low rates currently being charged and would encourage more insurers to do business in the state.



But at least one lawmaker, state Sen. Ron Klein (D-Boca Raton), is taking issue with the idea of enabling insurers to raise rates without state approval, calling the proposal "outrageous."



Klein said, "Until the Legislature and governor focus on the homeowner's interest, versus giving insurance everything they want, there will not be any price stabilization or availability of any new insurance policies in Florida."



The proposal also includes provisions dealing with Citizens Property Insurance Corp., the state's insurer of last resort and currently one of the largest insurers in the state, as it offers coverage to Florida residents that cannot obtain hurricane property insurance privately. For example, the bill would prevent Citizens from covering houses worth $1 million or more to help reduce the insurer's losses. Those homeowners would have to find coverage from high-risk insurance companies or go without insurance.



Source: Boca Raton News, John Johnston, Feb. 20, 2006


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