Underwhelmed by Sinkhole Decision

Florida Insurance Commissioner Kevin McCarty is being congratulated for limiting Citizens to an under 50% increase in sinkhole rates. Citizens had asked for a 4,000% rate increase.  It was clear that the Citizens hike wasn’t going to stick, and you had to wonder why they even did it.

No doubt the free-marketers on the Citizens board, under pressure from industry lobbyists, legislators, and the Governor’s office, decided they needed to dramatically raise rates to push customers into private companies. They couldn’t just serve their customers and try to do a good job, could they?

Once the decision was made to serve the private companies instead of consumers, the groundwork was laid for a very bad decision indeed. Why would anyone think it is a good decision to raise rates 4,000 percent when people are getting slammed by the worst recession in memory?  Pasco and Hernando are already very hard hit with empty developments and no jobs.  Foreclosure rates are soaring.

The response from those fronting for industry was that only 20% of people there actually had the coverage. So, I guess, the heck with them, right?  Guess not.  It turns out a lot of people were upset and they made a lot of noise.

What to do? What to do? Nobody in Tallahassee knows more about insurance that Commissioner Kevin McCarty, soon to be President of the NAIC.  It was predictable that they would ask McCarty to find a way out, and he did. The rate increase request was so full of holes, they had no justification at all for the numbers.

Citizens needs board members that don’t try to destroy the company with complete disregard for their customers. McCarty won’t always be able to bail them out. We need some competent people in there.

Sadly, it remains the policy of the Governor to close down Citizens and he appoints board members who agree. He wouldn’t do that with a company he owned. He’s put the best product, at the best price on the market and make some happy customers. That’s what Scott should do for Citizens.