On February 4 a special committee of the Florida Senate will hold two days of hearings on property insurance.  Committee members, including president-designate Jeff Atwater, will ask property insurance executives to explain why most homeowners insurance premiums in Florida remain high despite the legislature’s efforts to reduce rates. The executives will be required to testify under oath about their pricing practices and profits.

On January 10 senators sent a warning to the executives called to testify that any false statements could result in perjury charges and jail sentences.  Atwater said that the legislature enacted a law offering savings that were to be passed along directly to customers and that the committee was determined to discover why insurance executives have not complied.  It is unclear which insurance executives will be asked to appear before the Select Committee on Property Insurance Accountability, but those who do not respond to an invitation to testify voluntarily are likely to be subpoenaed. William Stander, assistant vice president of the Property Casualty Insurers Association of America, said that insurers welcomed the opportunity to explain the industry’s position.

Florida Gov. Charlie Crist (R) issued a statement applauding the upcoming hearings. “In spite of steps taken to lower the cost of insurance, it appears some insurance companies have failed to pass those savings along to customers as the law requires them to do,” said Crist. “Sometimes, big business can be just as bad as big government, and I applaud the Senate for taking action today to unravel the mystery of why insurance rates have not come down as we understood they would. For too long, the industry has profiteered on the backs of our people.”

January 15, 2008