Experts Speak to Fla. Senate Property Insurance Accountability Group
The insurance industry should not be allowed to thumb their nose at regulators and lawmakers, an expert told a Florida Senate panel Tuesday.
J. Robert Hunter, an actuary who has spent 45 years in the business, testified there was no doubt rates would be significantly higher in Florida if the Legislature had not passed a bill (HB 1A) a year ago providing cheaper reinsurance for companies.
But Hunter said some large national companies have not complied yet with the new insurance law designed to give consumers a break on their rates.
“From an actuarial view, they didn’t do what they should’ve done,” said Hunter, who now works for the Consumer Federation of America. “You can’t let a regulated industry thumb their nose at the regulators and the Legislature.”
Hunter testified for more than two hours Tuesday before the Select Committee on Property Insurance Accountability.
Sam Miller, vice president of the Florida Insurance Council, an industry group, said no company has tried to avoid the new law although several have had rate filings rejected.
Just last week, state regulators suspended Allstate’s 10 companies from doing any business in Florida although a court injunction has allowed the company to continue writing policies until the issue is resolved.
And another round in the state’s tug-of-war with the industry in an election year is just two weeks away.
The select committee has invited top executives from five companies to testify Feb. 4 and 5 on why savings from cheaper reinsurance have not resulted in lower premiums for consumers.
One industry economist said companies still have a $6.2 billion deficit from its Florida operations dating back to Hurricane Andrew in 1992.
Bob Hartwig of the Insurance Information Institute said Florida insurance companies have lost $6.7 billion dollars since 2004, despite two years without hurricanes.
“It’s very easy right now to demonize insurance companies,” added William Stander, regional manager for the Property Casualty Insurers Association of America. “There are a lot of small business people here … and some of them are insurance companies. How would some of those who were not insurance companies feel if the state was essentially trying to run them out of business?”
The new Senate committee, created earlier this month and comprised of 20 of the Senate’s 40 members, is co-chaired by Sen. Steve Geller, D-Cooper City and Sen. Jeff Atwater, R-North Palm Beach.