Letter from Florida – The Special Session Edition

by Christian R. Camara on July 13, 2010

made available under a Creative Commons license by perpetualplum/Flickr

Reverberations continue after Charlie Crist’s veto of the omnibus insurance reform bill in Florida. SB2044 would have increased solvency requirements for private insurers, allowed them to raise or lower rates within a 10 percent band only for inflation and reinsurance costs, and increased penalties for unethical public adjuster practices.

The bill was a moderate, compromise legislation that received wide bipartisan support. Crist vetoed the bill saying it would increase insurance premiums. Word in Florida is that an upcoming special session may be expanded to include a veto override of this and other bills vetoed by Crist. More on the special session later.


Earlier this year, the large Florida-only property insurance provider, Northern Capital, was entered into receivership by the Office of Insurance Regulation (OIR) after going insolvent. This came as a surprise to many spectators of the state’s insurance market, as it was not widely disseminated that the company was having financial troubles or that it was under administrative supervision for several months prior.

Internal OIR correspondence and records obtained by the Heartland Institute suggest that the Office wanted to keep the company’s problems out of news headlines. Their aim was likely two-fold: first, to prevent further deterioration of the company’s finances caused by negative press reports; and second, to avoid the resultant political backlash that would likely call for market-freeing reforms of the insurance system.

Regardless, I believe that the government entity charged with protecting consumers against unfit insurance companies should make every effort to keep the public informed as to what companies are sound and unsound. As such, we intend to call on the OIR to develop a mechanism whereby they can keep the public informed as to the financial health of the companies it oversees.


Governor Charlie Crist has called a special session in response to the Deepwater Horizon oil spill disaster in the Gulf of Mexico. His intention is for the Legislature to add a Constitutional amendment question onto this year’s November ballot to ban oil drilling in Florida state waters. Florida Statutes, however, already ban drilling in that area. Furthermore, as many critics of such a ban have pointed out, the current oil spill happened well beyond any purview of Florida state law or Constitution.

Special sessions are usually called for extreme circumstances that require immediate legislative action. Because there is already an oil drilling ban prescribed in Florida law that is not set to sunset any time, there is no such urgency in this case. Many have cynically referred to this special session as “Governor Crist’s photo session,” saying it is merely election year stunt, as he is currently in a hotly contested three-way race for United States Senate.

I will monitor this special session very closely, and will report on the decisions made by the Legislature in the next week or two.

Christian R. Cámara

Director of Florida Insurance Project

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