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SOCIALISM!! Florida Governor accuses insurance companies of "profiteering".


Ramen
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Florida governor said that, ""For too long, the industry has profiteered on the backs of our people."

It's SOCIALISM! SOCIALISM, I tell you! Run for the hills! Hide the women and children! The SOCIALISTS ARE COMING! The SOCIALISTS ARE COMING!

Florida Confronts Costs of Insurance

Despite Legislative Action, Substantial Rate Reductions Have Not Materialized

By Peter Whoriskey

Washington Post Staff Writer

Monday, January 21, 2008; A03

MIAMI -- When Gov. Charlie Crist ® took office a year ago, he quickly turned his attention to Florida's deepening hurricane insurance crisis.

Amid rising complaints that post-Katrina price increases were making the state unaffordable to many families, legislators in a special session approved a law that was supposed to drop the average wind insurance bill by 20 percent or more.

"We have a message for the people of Florida today: Help is on the way," Crist announced in a triumphant signing session.

But a year later, resolution of the state's hurricane insurance crisis seems as elusive as ever.

Last year's legislation saved insurers money because the state assumed billions more of the hurricane risk. But the savings that were supposed to be passed on to consumers have fallen far short of expectations. In fact, some major companies have proposed price increases.

Now with Crist and lawmakers evincing a sense of betrayal, a battle has erupted between the politicians and the industry over what went wrong -- and what Florida should do next about the crush of insurance costs.

In recent weeks, Crist has hired three private lawyers to look into the possibility of a class-action lawsuit against insurers. State regulators subpoenaed records from insurance companies. Insurance Commissioner Kevin McCarty prohibited Allstate from writing new policies until it complies, though that order was suspended Friday by a court ruling. Meanwhile, Florida Senate leaders said they would call for testimony from the executives of leading insurers.

"I would give the insurance industry an "F," a dead "F," because I think they have failed not only what the law requires, I think they have morally failed the people of Florida," Crist said recently.

The new prices, insurers say, reflect the daunting challenges of providing coverage in this hurricane-prone state after billion-dollar disasters such as Katrina, Rita and Wilma. Industry groups insist they never promised a big price cut after the legislation.

They blame politicians. The promised price cut, they suggest, was campaign rhetoric.

"We didn't promise these significant rates decreases -- those aren't our promises," said Sam Miller, executive vice president of the Florida Insurance Council.

Though last year's hurricane season was mild, insurance markets across the Southeast have been roiled in the aftermath of the disastrous seasons of 2004 and 2005.

Several insurers have pulled out of storm-prone regions; state legislators in Louisiana and Mississippi have sought ways to hold premiums down without driving away any more companies.

But the crisis may have been most acute in Florida, where a hurricane strike is deemed most likely.

When compared with rates in other states, home insurance rates in Florida, particularly in its densely populated coastal counties, are staggering.

The typical cost to cover a $150,000 home in Miami-Dade County exceeds $3,000 annually, according to the state. Coverage near the beach is much higher.

Rates began jumping after Hurricane Andrew in 1992. And after the busy 2004 and 2005 hurricane seasons, rates rose again. The state's failing real estate market -- and the exodus of many Floridians -- has been attributed in part to those rising costs. By the 2006 gubernatorial campaign, it became one of the state's leading issues in polls.

It still is.

"The single biggest crisis in the state today is the high cost of property insurance," state Sen. Steven Geller said recently.

While former governor Jeb Bush ® had espoused free-market solutions to the insurance complaints, Crist moved to get government involved.

At the time Crist took office, insurers were blaming the price increases on their rising costs of reinsurance -- basically, the insurance they bought to cover themselves in the event of a major strike.

To help the industry, legislators enlarged the "catastrophe fund" -- essentially letting the state assume a much larger share of the hurricane risk.

The measure put Florida taxpayers on the hook. But by saving insurers money, insurers could drop prices -- or so the thinking went.

"We assumed a large risk because the insurance industry told us rates would go down dramatically," Geller said. "There should have been a major rate cut."

Some insurers have proposed big price cuts, others have not.

According to state statistics, after initial filings, the cost of about one-third of insurance policies rose on average by 12 percent.

One of the state's largest companies, Allstate Floridian, for example, said rates would drop by 14 percent after the legislation. But within a few months, the company filed an amendment saying rates would rise by 42 percent, state records show.

Deb Clouser, a company spokeswoman, attributed the increase to the continued high cost of reinsurance.

"Enhancing the catastrophe fund was a step in the right direction and we absolutely support that," she said. "The problem that we have in Florida is hurricanes and we have to figure out how to [provide insurance] affordably."

No one disagrees with that.

The question is, who will bear the costs of living in hurricane-prone Florida?

While insurance companies maintain that their rates are a fair estimate of the risk, Crist and others say too much of the burden has been placed on homeowners.

Crist said last week that it is a "mystery" why rates did not come down more after the legislation and that he is looking forward to getting some answers.

"For too long, the industry has profiteered on the backs of our people," he said.

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Ramen (1/21/2008)

It's SOCIALISM! SOCIALISM, I tell you! Run for the hills! Hide the women and children! The SOCIALISTS ARE COMING! The SOCIALISTS ARE COMING!

For those of us who believe that our government has become far more massive and intrusive than ever intended by the Constitution, the socialists arrived a long time ago.

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