Rep. Davis Voices Concerns Over Industry’s Weakness in Fla.

While describing himself as a novice on insurance industry topics, Rep. Jim Davis, D-Tampa, summarized the current state of the industry in Florida during a Friday morning presentation to the Windstorm Insurance Network Conference in Tampa. Davis voiced fears that if there were fewer insurance companies doing business in the state, there would be less competition and that rate controls and legislation to control the industry would become more prevalent.

Davis openly supports the National Windstorm Impact Reduction Program which has already been passed, but which now needs financial support.

“This is a positive opportunity, I am happy to share details on this,” Davis said. “The short of it is that this bill puts together a group of people in academia, government, private sector and not-for profit, to study research about the most cost-effective and affordable practices for design and construction professionals and to develop cost-effective and affordable windstorm resistive systems and techniques for the general public.”

He suggested that this program is similar to exercises that took place in Florida after Hurricane Andrew including changes to building codes and other types of planning and coordination that might be necessary. He said it is not just a Florida problem, there are lots of other states with similar issues.

“On Monday, President Bush proposes his budget and one of the things I will be looking for is to make sure this program is funded,” Davis said. He said the budget is needed to hire a good staff and equipment to get the program rolling.

Davis spent a little time on the Insurance Committee in Tallahassee and said that, clearly the state has its hands full.

“I know from personal experience that homeowners insurance markets are very fragile here, I don’t know how fragile, but I know that even before the storms the state’s competition is not as good as it needs to be,” Davis said.

He explained that the insurance industry and the consumer agree that they don’t want surprises.

“The bank that owns my mortgage doesn’t like surprises in terms of cancellations or suddenly unexpected premium increases and it certain that the insurance industry doesn’t like surprises either,” the congressman said. “I wish I could think like an actuarial but I know that’s part of how the insurance has to think and to hope for a level of consistency and reasonableness.

“As a homeowner I want competition, I think that’s one of the best forms of consumer protection,” Davis explained. “My biggest concern right now is the potential tail-spin in which a bunch of companies leaving and the government becoming deeper involved in the insurance industry than it currently is. We need those tax dollars for other things like education, health care and more important programs.”

He said he is very concerned about what Florida can do to avoid losing companies and frankly what can be done over the short- and long-term to have more companies here for the sake of competition.

“Obviously there is a lot more disagreement than agreement between the consumer, the insured and the industry, that’s why the governor and the statewide elected CFO appointed an insurance commissioner whose job it is to preside over the rate-making process,” Davis concluded.

Topics Florida Market