Commentary from the Orlando Sentinel’s blog:
The insurance industry rate filings, prompted by a law crafted in January by Crist and the Florida Legislature, were far less than the reductions predicted by the state’s political leaders. Insurance Commissioner Kevin McCarty had estimated average rate reductions of 24 percent on their overall premiums.
State Farm Florida Insurance Co., the state’s largest private home insurer, last week requested a statewide average decrease of 7 percent. Among other big insurers, Allstate Floridian Insurance Co. suggested a 14 percent reduction, Nationwide Insurance Co. of Florida came in at 4.6 percent, and USAA with 3.1 percent.
After the plans from the state’s biggest private property insurers came out, Crist said he met with state Insurance Commissioner Kevin McCarty and asked, “What’s up with the filings. Some of them are miniscule, some of them are 34 percent – which we like – in reductions. And he said, ‘Well that doesn’t mean we have to accept their nominal reduction, governor.’ I said, God I love you.”[...]
I’ll mention that if you’d like to check out some of the filings being discussed, non-trade-secret portions of companies’ filings in Florida are available online at http://www.fldfs.com/edms. Be sure to select “2007 FHCF Presumed Factor” as a filter to see what the fuss is about.
For example, the USAA filing mentions:
The reinsurance purchased by USAA has a FL rate-on-line of less than 6%, which
is much lower than the OIR’s estimated average industry rate-on-line of 20%. This means that USAA will not see a large reduction in reinsurance expense from the new FHCF TICL layers, which have a 2.2% rate-on-line.