TALLAHASSEE, Fla. - Florida Gov. Charlie Crist, who served as the state's attorney general from 2003-2007, has taken away insurance companies' right to drop their policyholders, or raise their rates.
On Tuesday, insurers became unable to make those changes for 90 days and, combined with recently passed legislation, will not be able to drop any state homeowners until November.
The legislation mandates a reduction in homeowner premiums from private insurers by 5% to 25% as the state prepares for what it expects to be a busy hurricane season.
An editorial in the Wall Street Journal charged that the measure, which encourages the state of Florida-owned "insurer of last resort" Citizen's Property Insurance to compete for more business, will merely transfer risk exposure from private insurers to taxpayers.
"As a government company (Citizens) will not have to worry about profits and other capitalist details," the editorial said. "These arrangements typically end badly for the taxpayers, who in this case will be absorbing future hurricane risk without even realizing it."
Florida Insurance Commissioner Kevin McCarty said that was fine with him.
"(Insurance companies) are going to threaten to leave the state. I have heard it a thousand times," he told the Talahassee Democrat. "We are already in a period of chaos and instability in Florida."
The law also forces insurance companies that offer auto and home policies in other states to offer home insurance in Florida or be banned from the marketplace.
Crist hurriedly passed the 90-day order last weekend, catching State Farm Florida before it could execute its plan to drop 40,000 policyholders.
Meanwhile, current Florida Attorney General Bill McCollum on Friday issued a price-gouging alert after a series of deadly tornadoes ripped through the state, causing Crist to declare a state of emergency in four counties.
"We will do whatever is necessary to help protect Floridians from those who might try to take advantage of them in the wake of this disaster," McCollum said.