Florida Governor Beefs Up Insurer Penalties in Homeowners’ Bill of Rights Legislation

On Wednesday Florida Governor Charlie Crist signed legislation that beefs-up penalties for insurers that violate state regulations and extends a freeze on Citizens Property Insurance Corp.'s rates.  
 
Touted as a "homeowners' bill of rights," the sweeping property insurance bill was made up of about 25 parts. The governor approved all but one: a provision providing loans to small insurers.  
 
"The bill contains many important consumer protections that will help keep insurance costs more affordable," he wrote in signing the bill.  
 
Crist's has long called for lowering insurance rates and holding insurers accountable since he was elected in 2006 so the bill comes as no surprise Late last year, Crist recruited a team of attorneys to investigate whether the state should sue insurers over certain rate hikes.  
 
What surprised some observers is that Crist vetoed the only part of the bill that many opponents liked: expanding a program that provides small insurers with loans in exchange for the insurers taking policies from state-backed Citizens. Crist said he likes the program because it helped shift about 200,000 Citizens policies to private insurers. But he doesn't like that the additional $250 million sought for the program would come from Citizens, which may already struggle to pay claims if there is major hurricane.  
 
"The citizens of Florida are already feeling the heavy weight of property insurance and property tax burdens. I do not support risking an additional financial hardship," Crist wrote.  
 
Sam Miller, executive vice president of the Florida Insurance Council, said he hopes the program is expanded next year. "Given its dramatic success, it's unfortunate that ... it's not going to be fully recharged right away," Miller said.  
 
The bill Crist signed Wednesday extends a provision allowing regulators to block insurers' rate hikes before they take effect and prolongs a freeze on Citizens Property Insurance Corp.'s rates for one year, to January 2010.  

Published on May 29, 2008