Rethink Government’s Role in Insurance Regs

by Matthew Glans on February 15, 2011

Florida’s struggle to create a competitive and thriving insurance market has seen little success in recent years, but a new proposal now being considered in the Florida Legislature could be moving the state in the right direction. In a new piece recently published in the Orlando Sentinel, Christian Camara, the Florida Director of the Center on Finance, Insurance and Real Estate at The Heartland Institute, examines Florida’s down insurance market and the new regs designed to restore competition to the market.

In his article, Camara discusses how the new proposal being considered in Tallahassee moves Florida more in line with other states and gives insurers the flexibility they need to manage the considerable risk posed in the coastal state.

Christian’s article, “Rethink Government’s Role in Insurance Regs,” was originally published in the Orlando Sentinel February 14 and is available online at:,0,4076871.story

Rethink Government’s Role in Insurance Regs
By:  Christian Camara

The editorial “Property-insurance reform package could harm consumers” (, Feb. 5) is a reminder of an alarming fact: Despite five hurricane-free years, Florida’s insurance market is still in shambles.

More than half the property insurers are losing money even without hurricanes, fewer insurance companies are competing, financial stability is reduced, and the state-owned property insurance company has grown to be the largest insurer in Florida.

The best solution to these issues requires a fundamental rethinking of government’s role in insurance regulation. Government should not dictate insurance rates, but rather level the playing field by fighting fraud and ensuring that companies selling policies in Florida are able to pay customers’ claims.

The property-insurance reform bill before the Legislature is a first step to addressing some of these problems. Insurance is not meant to be a lottery jackpot; it is meant to indemnify policy holders — to restore property after a covered loss to what it was at the time the policy was executed. Mandating that repairs be made before full payment of claims reduces fraud and is already the law in most states.

Granting private companies the flexibility to slightly raise or lower their rates would allow them to compensate for market forces such as inflation without triggering the most onerous bureaucratic rate-filing process in the country. This would entice more companies to re-enter the Florida market and increase competition to the benefit of consumers.

Christian R. Cámara Florida Insurance Project Director, Heartland Institute

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