Randy Schultz: Tallahassee’s policy for insurers: Cut their costs, hope for rate cuts
Whenever the companies have a problem, they ask the Legislature to fix it. They claim that the fix will help consumers through lower rates
The latest example is "assignment of benefits." A homeowner allows a contractor to negotiate with the insurer over a claim. Homeowners do this because they believe that a third party will have better luck getting full payment for the claim.
After several failures, the industry this year got the Legislature to change the assignment of benefits system. Among other things to limit insurers' costs, the legislation limits attorneys' fees when third parties sue over a claim.
The executive director of the
Um, no.
As the
States regulate insurers, but reinsurers operate globally and are unregulated. They make their own bets each year, on Pacific typhoons, earthquakes and tsunamis, floods -- and
If reinsurers raise rates, insurers will raise them on policyholders. Any help from the assignment of benefits legislation won't come soon -- if it comes at all.
Hurricane Andrew in 1992 tore up property insurance in
With that legislation, in essence, regulators and legislators struck this deal with the industry: Consumers wouldn't get big rate cuts after calm hurricane seasons, but they wouldn't get big increases after bad seasons.
Then came the 2004-05 seasons, which culminated with Hurricane Wilma. Despite those post-Andrew reforms, another crisis hit the state. So
For nearly three decades,
Homeowners also can file for rate increases of less than 15 percent without a full hearing. A company could raise rates by nearly 30 percent over two years with comparatively little scrutiny from the
In 2010, the
Even industry critics acknowledge that
In
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