CEI Responds to McCarty’s Statements on SB 2036

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

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. 

CEI is a non-profit, non-partisan
public policy group dedicated to the principles of free enterprise and limited
government.  For more information about
CEI, please visit our website at www.cei.org.