Panel seeks answers on rates
TALLAHASSEE (AP) – Some insurance companies could go out of business if a major hurricane hits Florida, the state’s insurance commissioner told a Senate panel Tuesday.
But after more than an hour grilling by lawmakers, Commissioner Kevin McCarty didn’t provide specifics on which companies might fail or why, telling senators that it’s all part of being in the risk business.
“Florida remains the epicenter in terms of concentration of risk,” McCarty told the Senate Banking and Insurance Committee, chaired by Sen. Garrett Richter, R-Naples.
McCarty, who has frequently sparred with lawmakers on the state’s insurance regulations, said Florida’s property insurance liability is now $2.1 trillion, which would likely bankrupt even some of the largest insurers.
“Failure is going to happen,” McCarty re-emphasized afterward with reporters. “They are in a risk assuming business.”
The lawmakers zeroed in on the viability of the property insurance marketplace across Florida, but some remained skeptical afterward, especially with what they see as politics by the governor’s office and McCarty to kick State Farm Florida out of the state over rate filing disputes.
“He’s artful at evading real answers to the questions,” Sen. JD Alexander said after the meeting, adding that it is foolish to remove a highly capitalized company that has paid claims for 150 years from the state.
Alexander said Crist’s campaign rhetoric on holding down property insurance rates amounts to little more than a “Trojan Horse” that he said fails to protect consumers.
Richter said the committee was disappointed that Crist vetoed a bill earlier this year that would have allowed consumers to pay unregulated rates to buy coverage for hurricanes and other hazards from highly capitalized, solvent national insurers such as State Farm.