Crist’s team will review insurance-rate reforms

December 21, 2007
Author: The Orlando Sentinel, Fla., Aaron Deslatte. Distributed by McClatchy-Tribune Information Services.

TALLAHASSEE, Fla. – Dec. 20, 2007 – Gov. Charlie Crist has asked three prominent trial lawyers to review the property insurance industry’s compliance with an 11-month-old reform plan and recommend whether to sue the insurers.

At issue: the law passed in January that increased the size of the state’s hurricane-catastrophe fund in the hope of lowering the cost of reinsurance to insurers.

Those companies that bought from the state were supposed to then pass those savings on to policyholders.

Crist has railed for months that the industry has not lowered rates by the roughly 24 percent that the governor and Legislature were told the legislation would save.

Industry spokesmen were unavailable Tuesday, but the industry has maintained for months that the risk of Florida being hit by one or more major hurricanes requires that rates be kept high.

In recent months, the state Office of Insurance Regulation has subpoenaed records from insurers like Allstate and reached a settlement with State Farm to help in its investigation of whether insurers are colluding to thwart the law.

Now Crist’s office has enlisted the help of Dexter Douglass, a veteran trial lawyer and general counsel to former Gov. Lawton Chiles; Bob Hackleman, a Fort Lauderdale lawyer with Gunster, Yoakley and Stewart; and former Miami U.S. Attorney Roberto Martinez, who was Crist’s transition chairman after his election.

“I’m frustrated with the fact that rates haven’t come down more, and I’m concerned about the legality of them not bringing the rates down,” Crist said recently in an interview with the Orlando Sentinel.

“The law says the savings enjoyed by the insurance company must be passed on to the consumers. Well, they’re not all doing it.”

Crist’s office said the legal team would look at the responses insurers have filed to the subpoenas and review every company that has filed for a rate increase.

One of the options, Crist’s office said, is a class-action lawsuit. “The real question here is, why aren’t you adhering to the letter of the law?” Crist said.