Florida rules to rigid, property insurers contend: Florida insurance regulators disputed accusations that they pose a worse threat than hurricanes to the property insurance industry. [The Miami Herald]

May 27--Hurricanes aren't the real threat to the Florida insurance industry. It's the regulators that do the damage, the head of an industry-backed nonprofit said Wednesday at the annual Governor's Hurricane Conference in Fort Lauderdale.

Days before the start of hurricane season, Insurance Information Institute President Robert Hartwig said regulators' efforts to limit rate increases and cut customers' premiums for weather-proofing their homes have actually hurt Florida consumers in the long run. Many people who don't own property -- including most Floridians with a car -- pay for storm debt for years after the fact through assessments tacked onto their premiums.

Hartwig called Florida's insurance market America's "most dysfunctional," saying that more companies would offer coverage here if they could charge the rates they want to, increasing choices for customers. That would also allow those who wish to pay more for more coverage to do so -- just as people who want to pay for a more expensive car do.

He was unsympathetic to consumer gripes about the cost of insurance, which he calls the price of living in Florida.

"You can go to different parts of the country and pay more for something or the other," he said, adding that living here is a choice. "People live in these condos not because it's the only place in America they could find to live."

The only compliments he offered Florida were for its strong building code and encouraging homeowners to fortify their homes -- although he thinks the credits awarded for upgrades are far too generous.

The Florida Office of Insurance Regulation, which has been under fire lately because several insurers have become insolvent in the past few years -- though there have been no major storms in the state since 2005 -- disagreed with Hartwig's characterization. Thousands of insurance policies held by private companies will expire at the end of this month because of the companies' failures.

"As a matter of fact, Florida worked with the industry, including the Florida Insurance Council, to identify cost-drivers that are negatively impacting the insurance industry in Florida. The result was . . . a bill passed by the Florida Legislature that received support from the industry, regulators and consumer advocates," spokesman Jack McDermott said.

"The bill gives the office more resources to monitor insurance company transactions with affiliates, enhances insurer solvency, and reduces fraud in addition to addressing cost drivers."

The bill is now on Gov. Charlie Crist's desk.

The state also defended its methods of overseeing rate increases.

"The office's goal is to ensure insurance rates are justified, fair, adequate and not excessive," McDermott said.

Consumer advocates also approved of Florida's regulators.

"Everybody should be following Florida's lead," said Robert Hunter, former insurance commissioner in Texas. He is now director of insurance at the Consumer Federation of America.

He said if insurers really found Florida an unprofitable black hole -- Hartwig said the industry overall has been in the red since Hurricane Andrew in 1992 -- they would have found a way to leave the state.

"They're crying poor," Hunter said. "If it was that bad, would they still be there?"

To see more of The Miami Herald or to subscribe to the newspaper, go to http://www.herald.com.

Copyright (c) 2010, The Miami Herald

Distributed by McClatchy-Tribune Information Services.

For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.