Insurance Panel Likely to Hear From McCarty
Insurance Commissioner Kevin McCarty will likely go before a House insurance panel in the coming months to discuss the property insurance market as questions continue over just how much solid coverage is available in the face of a pull out by State Farm.
Rep. Pat Patterson, R-DeLand, chairman of the House Insurance, Business & Financial Affairs Policy Committee, said Monday that if he remains chairman of the panel he believes it is likely the panel will hear from McCarty because of an ongoing question about how many companies are writing property coverage in Florida and how much capital they have.
“Normally, as a matter of courtesy, the commissioner and other people that come under our policy committee usually request to come before us anyway, so I assume he would probably be making a request,” Patterson said.
His remarks followed a letter Rep. Scott Plakon sent last week to Patterson urging him to “extend an invitation” to McCarty in light of a seeming inability for anyone to agree on exactly what the situation is in the private property insurance market.
“In light of an unprecedented amount of conflicting information to which we have been exposed of late, I am concerned that the answers are becoming more muddled as time goes on,” wrote Plakon, R-Longwood.
As lawmakers last year contemplated a measure that would have allowed some insurance companies to go unregulated, McCarty told lawmakers that there were 40 companies with $4 billion in capital writing hurricane policies. The issue was relevant because it went to whether the state had an interest in making concessions to large insurers like State Farm to keep them here, or whether there were enough alternatives for residents to get private insurance coverage from companies that could be considered safe bets to be able to pay all the claims that might result from a big storm.
Eventually, the Legislature passed the bill (HB 1171), but Gov. Charlie Crist vetoed it.
In doing so, Crist used as justification, in part, the notion that the property insurance market was well-capitalized.
But since then, McCarty's figures on how much private coverage was out there have come into question, most vocally from Rep. Bill Proctor, R-St. Augustine, who sponsored the legislation Crist vetoed, and most recently from state Chief Financial Officer Alex Sink.
In response to a request from Sink, McCarty recently reported to the Cabinet that about $600 million in new capital has been added to the property insurance market since 2006.
If there isn't enough capital to cover claims, “we are exposed,” Plakon said in an interview with The News Service on Monday. “We make decisions on legislation and it seems like the information we've gotten has seemed to be a moving target.
“I just thought it appropriate that Commissioner McCarty help us clarify, so we have a good understanding of what the capital in-flows and out-flows look like,” Plakon said.
McCarty spokesman Tom Zutell said McCarty “is always willing to continue meeting with lawmakers to discuss the state of Florida's property insurance market, and he appreciates the opportunity to clarify the misinformation that is being perpetuated in the press.”
Zutell said McCarty has also already had “several productive meetings on this subject” with House and Senate leaders.
In a statement released Monday, Zutell said that a total of $607 million in investment capital from admitted insurers has enabled more nearly 616,000 new personal residential policies to be written as of the end of last year. McCarty has said that a higher number, approaching $5 billion, includes other types of insurers, such as unregulated surplus lines insurers.