Crist apparently discounted the advice he got from Insurance Commissioner Kevin McCarty, typically an ally of his, who had urged him to sign SB2044. The bill will make sure that “all potential rate increases are reviewed and approved or rejected by OIR [Office of Insurance Regulation] prior to one penny being paid by consumers,” McCarty had written to the governor.
In vetoing the bill, however, Crist actually allows insurers to go ahead and implement new rates before getting state approval under a use-and-file system. The bill would have required approval before use.
Crist also said he opposed the bill’s provision reining in premium discounts for homeowners who strengthen their homes against hurricanes. A state audit had found this mitigation program riddled with fraud and overly-generous discounts. But Crist said he was troubled that honest policyholders who took responsible steps to fortify their homes would be penalized under the tighter rules.
The bill, sponsored by Sen. Garrett Richter, R-Naples, also would have addressed solvency concerns by imposing a higher capital requirement of $15 million for a new home insurer.
It also would have more closely regulated the transactions between carriers and their affiliated companies, a reform Crist said he supported at a Cabinet meeting earlier this year.
Crist released his veto message just a few hours before the midnight deadline after which the bill would have become law without his signature.
The insurance industry had backed the bill as one way to get at some the forces driving up costs, including rising sinkhole claims and millions of dollars in claims from Hurricane Wilma that are being re-opened by claims adjusters five years after the storm. The bill would have more closely regulated public adjusters and their fees. It also would have allowed insurers to retain a portion of replacement cost claims payments until there is proof repairs are being made.
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