Gov. Charlie Crist has asked three trial lawyers to review documents for a possible class-action lawsuit against property insurers, alleging that the industry hasn’t passed on savings to consumers as required by Florida law.
Crist asked his general counsel and three private attorneys to review responses from recent insurance subpoenas to see if January’s law aimed at reducing rates for homeowners and others is being followed.
“I’m very frustrated as I know the people of Florida are,” Crist said. “Some companies have done the right thing and I think followed the new law that the legislature passed. But some companies, I’m very close to being completely convinced that they’re just violating the law. ”
Crist has asked attorneys Bob Hackleman, Bobby Martinez and Dexter Douglass to provide advice on possible actions against insurance companies, including a possible class-action suit.
The attorneys are initially working for free, Crist said. Martinez is a former U.S. attorney in Miami who chaired Crist’s transition team. Douglass worked on the state’s lawsuits against the tobacco industry during the 1990s.
Crist said he hoped to have an idea of what the state will do by the end of January.
Sam Miller, spokesman for the Florida Insurance Council, said that the industry won’t duck a legal fight.
“We paid out $37 billion in the eight hurricanes in 2004 and 2005 and as a result of that rates started going up and now we’re accused of all kinds of things that are unfounded,” Miller said. “We will defend ourselves in court if we have to and will be proven right.”
Lawmakers in January expanded the state’s Hurricane Catastrophe Fund to allow insurers to buy reinsurance at lower cost than from private reinsurers. The law says insurers must then pass on those savings to their customers.
“Legislative branch did its job. Executive branch is charged with enforcing the law. So I’m doing everything I can to do that,” Crist said.
Last month, state regulators rejected a homeowners’ rate increase sought by four Allstate companies. A few days later the state’s insurance regulators subpoenaed the Allstate companies for a Jan. 15 hearing to explain why they want to boost premiums in the wake of record profits.
In October, State Farm bowed to Florida regulators by agreeing to lower rates by 9 percent.
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