Detractors called House Bill 1171 the “State Farm Bailout Bill.”
Supporters said it would give consumers more choice in a state with huge property insurance challenges.
In the end, Gov. Charlie Crist came down on the side of detractors, and Wednesday vetoed the bill.
The bill would have allowed certain large insurance companies to offer property insurance with rates unregulated by the state.
Crist said that was unacceptable, that it amounted to letting the select insurance companies “cherry pick” the most profitable policyholders while offloading less desirable customers.
In his veto message, Crist claimed the bill would “likely result in significant and unpredictable rate increases that, during these economic times, people can simply not afford.”
Crist’s letter went on to say there is no provision in the bill that would allow consumers to review options and make a choice that best fits their needs.
“On the contrary, the bill actually gives the ‘choice’ to a select group of property insurance companies and allows them to decide who they are willing to sell a non-regulated policy,” Crist wrote.
State Sen. Mike Bennett, R-Bradenton, and state Rep. Bill Proctor, R-St. Augustine, sponsors of the bill, said they were deeply disappointed.
“I think the governor made a serious error,” Bennett said on Wednesday, “and I think the error was based on input from his staff, and I think his staff twisted the facts to suit their needs.”
One of those facts, Bennett said, is that of the 40 small private domestic insurers, 13 are surplus lines companies. Bennett and Proctor, in the letter, stated that it is incumbent upon Insurance Commissioner Kevin McCarty to explain how Citizens Property Insurance Corp. and the 40 insurers represent an adequate homeowners’ insurance program in a hurricane-prone state. The lawmakers also demanded an explanation about how the state will “insure the payment of claims resulting from a major storm striking a large metropolitan area with insured losses of $50 billion to $100 billion.”
After the legislative session, Bennett called on Kevin McCarty to resign on grounds that “my colleagues and I are no longer able to trust your word.”
Further, Bennett asked that Crist fire McCarty if he refused to resign.
Those demands fell on deaf ears.
“I want to commend Commissioner Kevin McCarty for his continuing efforts to create a competitive property insurance marketplace, while ensuring Florida’s consumers have the opportunity to purchase affordable insurance products,” Crist wrote Wednesday.
Bennett said he was looking at options after the veto.
“A veto override would be based upon the fact that we believe the governor wasn’t fed proper information,” Bennett said.
An override would require a 2/3-vote by both chambers of legislature. During session, the bill won the votes of 85 percent of lawmakers, according to the Miami Herald. — Staff writer Sara Kennedy contributed to this report.