Fla. Gov. Asks Lawyers to Review Suing Property Insurers over Rates

December 21, 2007

Gov. Charlie Crist said Wednesday he wants three trial lawyers to review documents for a possible class-action lawsuit against property insurers, alleging that the industry hasn’t passed on savings to consumers as required by a new Florida law.

Crist asked his general counsel and three prominent private attorneys on Tuesday to review responses from recent insurance subpoenas to see if January’s law aimed at reducing rates for homeowners and others is being followed.

“I’m very frustrated as I know the people of Florida are,” Crist said Wednesday in Miami. “Some companies have done the right thing and I think followed the new law that the legislature passed. But some companies, I’m very close to being completely convinced that they’re just violating the law. ”

Crist has asked attorneys Bob Hackleman, Bobby Martinez and Dexter Douglass to provide advice on possible actions that could be taken against insurance companies, including a possible class-action suit.

The private attorneys are initially working for free, Crist said. Martinez is a former U.S. attorney in Miami who chaired Crist’s transition team. Douglass worked on the state’s lawsuits against the tobacco industry during the 1990s.

Crist said he hoped to have an idea of what the state will do by the end of January.

Sam Miller, spokesman for the Florida Insurance Council, said Crist isn’t focusing in the right place and that the industry won’t duck a legal fight.

“We paid out $37 billion in the eight hurricanes in 2004 and 2005 and as a result of that rates started going up and now we’re accused of all kinds of things that are unfounded,” Miller said. “We will defend ourselves in court if we have to and will be proven right.”

With insurance rates spiraling upward after the busy 2004 and 2005 hurricane seasons, lawmakers in January expanded the state’s Hurricane Catastrophe Fund to allow insurers to get more of their backup coverage there; it’s cheaper than private policies. The law says insurers must then pass on those savings to their customers.

“Legislative branch did its job. Executive branch is charged with enforcing the law. So I’m doing everything I can to do that,” Crist said.

Last month, state regulators rejected a homeowners’ rate increase sought by four Allstate companies – one of the large national companies reducing their stake in Florida.

A few days later the state’s insurance regulators subpoenaed the Allstate companies for a January hearing to explain why they want to boost premiums in the wake of record profits. Executives from Allstate are scheduled to meet with officials in Tallahassee on Jan. 15 and 16.

Adam Shores, a spokesman for Allstate, one of the state’s largest property insurers, did not immediately return messages left for comment on the governor’s newest salvo against an industry he has regularly criticized for the last year.

In October, State Farm bowed to Florida regulators by agreeing to lower rates by an average of 9 percent, give refunds to make up for an overcharge, and make it easier for some car insurance customers to save money.

Associated Press reporters Brent Kallestad and Jon Manson-Hing in Tallahassee contributed to this report.

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