The Insurance Journal ran an article, Florida Domestic Insurers Urge Veto of ‘Dangerous’ Deregulation Bill, which indicates a significant portion of Florida’s insurance industry opposes State Farm, State Farm agents, and the other big insurers trying to get a competitive advantage from this legislation. The article outlined many of the competing views and stated in part:
"[T]he Florida Property & Casualty Association (FPCA), representing Florida-based companies writing 40 percent of the market, is urging Crist to veto the measure, arguing that it is an "unbalanced and dangerously fragmented approach to deregulation" and that it will have "long term negative" consequences for consumers and businesses.
The measure would create a "bifurcated and unlevel insurance market where large insurers and smaller Florida domestic insurers would be governed by diametrically opposed sets of rules," the FPCA wrote in a letter to Crist. Under this system, large insurers could "cherry pick" risks and effectively redline by offering excessively high rates in areas where they really do not want to write business, while other insurers would be restrained from competing in an open market, according to the FPCA.
The result will be more risks placed in the state-backed Citizens Property Insurance Corp. and more exposure to assessments by Citizens and the state hurricane fund for all policyholders, FPCA wrote.
The FPCA says it supports a competitive marketplace but not the approach taken by this bill."
Craig Duncan should be nominated for the insurance lobbyist of the year 2009. He heads the Council of Florida Agents (COFA) which is the organized group of State Farm agents. Through Duncan’s leadership, this organization significantly helped the State Farm bill pass. State Farm has a talented agent force, and they used their grass roots and hard work to do what I considered the impossible–convince elected representatives to thumb their noses at the State and allow big insurers to charge rates that can be price-fixed.
It should be noted that the Florida Association of Independent Agents (FAIA) did not endorse the measure nor did any consumer interest groups. Still, the Florida Chamber of Commerce has been criticized by some as dominated by large insurance groups and nobody should think of its poll, noted in the article, as being fair or in the best interest of small business owners. Why would business owners want rates to go up without limit? Why would they want to buy the same insurance at a higher price because they can "choose" to do so? Sounds stupid to me and just about anybody with some common sense. Governor Crist needs to veto this bad law for a number of reasons, not the least is the message that large corporations can have Florida laws changed to provide them a competitive edge over small businesses if they simply lobby Florida elected officials and provide good sounding spin.