Hold On To Your Wallets

The Florida Legislature meets in special session today to consider a compromise hurricane insurance bill, dubbed the Insurance Industry Accountability and Consumer Protection Act. Representatives from Fair Insurance Rates in Monroe (FIRM) and other groups will be in Tallahassee to continue to pressure legislators.

The one big thing that is not in the legislation is a provision preventing the insurance companies from charging increased rates before they are approved by he Office of Insurance Regulation. This is the practice (the so called "use and file" practice) which allowed Citizens Insurance and others to set and charge the rate hikes they did and only later file for approval of those hikes with the Office of Insurance Regulation.

This practice, which is unethical at best, allows the companies to rake in millions and keep that money until the Insurance Commissioner orders them to return it. In effect the practice makes consumers the insurance companies' bankers, providing involuntary loans that cannot collect until the Office of Insurance Regulation steps in. In short, the consumer is forced to pay the premium increase (even if the increase is later disapproved) or risk either going without insurance or not being able to get insurance later.

Without a provision banning this unsavory practice, the insurance companies will still be in the drivers seat as far as rates are concerned even when it comes to negotiating with the Office of Insurance Regulation.