by Eli Lehrer
April 28, 2009

Washington, D.C., April 28, 2009—The director of The Competitive Enterprise Institute’s insurance project responded today to Office of Insurance Regulation (OIR) head Kevin McCarty’s statements about SB 2036 and HB 1171. Eli Lehrer, the head of the free market think tank’s insurance project, said that he agreed with certain parts of McCarty’s statements and disagreed with others. The bills allow large, financially stable insurers to write policies without being batted down for charging “excessive” rates.

“Yes, some companies will increase their prices if these proposals become law,” says Lehrer. “But insurance is about more than price and consumers who want to pay more to stick with a company they know should certainly be able to do that. The products that OIR approves right now carry with them a massive amount of ‘pay later’ rate increases in the form of special assessments. Many smart customers will want to buy more expensive policies up front rather than having to pay through the nose as soon as a major storm hits.”

Lehrer adds, however, that he feels the proposals are insufficient on their own. “I can’t see a real downside to doing this. It will preserve consumer choice, and increase market competition. Those who don’t like what this bill offers don’t have to partake in it,” says Lehrer. He adds, however, that simply allowing another type of competition isn’t sufficient: “Really changing things is going to require fundamental reforms to Florida’s rate regulation system, Citizens, and the Cat Fund,” he says. 

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