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Insurance Concerns

June 1st, 2010 by Mike Vasilinda

Governor Charlie Crist has spent the day contemplating whether to sign or veto legislation giving some rate relief to insurance companies and decreasing the amount of time policy holders have to file a claim. A veto is widely expected, but as Mike Vasilinda tells us, the Governor is also getting a lot of pressure to let the bill become law.

Florida has been hurricane free since 2005; yet many of the insurance companies say they are losing money.

State Lawmakers responded with bills two years in row. The latest version was more consumer friendly, but both allowed insurers to pass along rate hikes of up to 10 percent.

Jeff Grady of the Florida Association of Insurance Agents says Lawmakers learned from the 2009 veto and the rate hike this time was limited to increasing costs.

Its not someone trying to get a leg up,” Grady said. “Its trying to get off the mat, to be financially stable.

Lawmakers also shortened from five to three years the time for filing a claim, and required homeowners to have receipts before being reimbursed for damaged contents.

Unlike last year, the bill had the support of the State Insurance Commissioner, in part because it requires companies to have more cash on hand to pay claims.

What were concerned about is that the minimum capital surplus of the company stays within the company and that money does not leak out through affiliated parties,” Insurance Commissioner Kevin McCarty said.

Between the policies that State Farm is shedding and the companies with no financial backing, there are about 300,000 policies in flux in Florida right now. Most of them headed to Citizens.

And without new hope for bigger profits, the industry says the state run Citizens Insurance will only keep getting bigger and less able to pay claims if a major store hits.

Under one provision of the bill, new insurance companies would need three times as much money to begin writing polices as they need now.

Posted in Business, Charlie Crist, Hurricane Season, Insurance, Legislature, State Budget, State News, Weather | No Comments »

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