Florida Government and Politics Weekly Update

Property Insurance: Governor Charlie Crist Vetoes “Consumer Choice” Deregulation Bill
On June 24, 2009, Gov. Crist vetoed HB 1171, the so-called Consumer Choice bill that would have allowed some highly capitalized insurance companies to market residential property policies without being subject to regulatory review for rate excessiveness. The bill would have allowed insurers that had a net worth (technically, “surplus as to policyholders”) of $150 million or more and that met certain other criteria to offer the deregulated policies after making specified disclosures to the consumer.

The bill was generally viewed as a response to the decision of State Farm Florida Insurance Co. to cease writing property insurance in the state, which followed the Office of Insurance Regulation’s January 2009 denial of State Farm Florida’s proposed 47-percent rate increase. It was supported by large insurers, Florida Tax Watch, business groups such as the Florida Chamber of Commerce and Associated Industries of Florida, and think tanks such as the Competitive Enterprise Institute. The bill was opposed by Insurance Commissioner Kevin M. McCarty, the Consumer Federation of America, and some smaller property insurers.

In his veto letter, the governor said that the bill would have benefited only a small group of insurance companies. “These select property insurance companies will be able to cherry-pick, or sell only to profitable policyholder risks, while at the same time off-loading their undesirable policyholders that are higher risk to their competitors and Citizens Property Insurance Corp.” He also said that the bill would “disrupt the effort to build an increasingly competitive insurance marketplace and treat certain insurers differently than the emerging Florida domestic companies.” In recent years, the Florida market has come to be dominated by the state-created Citizens Property Insurance Corp. and new Florida-only companies, many of which rely on capital borrowed from a state incentive program.

The sponsors of the bill, Rep. William “Bill” Proctor (R-St. Augustine) and Sen. Michael “Mike” Bennett (R-Bradenton) responded by stating that the bill would have “allowed consumers to decide for themselves — rather than having the state decide for them — whether they want to pay a market-based rate to have their home insured by a large, financially strong private insurer,” with very strong consumer protections and disclosures. It is not clear whether Rep. Proctor and Sen. Bennett will pursue an override of the veto.

State Farm Florida has indicated that it will proceed with its planned withdrawal from Florida. The company had previously indicated that it would reconsider actions to address what its president described as its “rapidly deteriorating financial condition” if HB 1171 had become law. State Farm Florida, the state’s second-largest property insurer, has approximately 800,000 homeowner’s policies in force in Florida.

Gov. Crist also vetoed two other bills on June 24, 2009, both of which would have created exemptions from the Florida public records law. SB 166 would have allowed donors who provided funds for public buildings to keep their names confidential, and HB 7093 would have maintained confidentiality for certain proprietary business information provided to the state by telecommunications companies.

Politics: Rasmussen Poll Shows Attorney General McCollum Ahead of CFO Sink in the 2010 Gubernatorial Race, Governor Crist Ahead in U.S. Senate Contest
In surveys released on June 24 and 25, 2009, Rasmussen Reports found Republican Attorney General Bill McCollum eight percentage points ahead of Democratic CFO Alex Sink in the 2010 Florida governor’s race, and Republican Gov. Charlie Crist with a strong lead over either of his potential Democratic opponents in the race to succeed retiring U.S. Sen. Mel Martinez.

In the election for governor, 42 percent of the survey respondents supported Attorney General McCollum, 34 percent supported CFO Sink, seven percent supported some other candidate, and 18 percent were not sure.

The survey also pitted Gov. Crist against his two most likely Democratic opponents for the U.S. Senate seat, Rep. Kendrick Meek (D-17^th Congressional District) and Rep. Corrine Brown (D-3^rd Congressional District). Respondents favored Gov. Crist by 50 percent to Rep. Brown’s 29 percent, with eight percent supporting some other candidate and 13 percent not sure. Gov. Crist led Rep. Meek by 46 percent to 28 percent, with 12 percent supporting some other candidate and 14 percent not sure. Rasmussen did not release any information about the Republican primary race between Gov. Crist and former state House Speaker Marco Rubio (R-West Miami) or the anticipated Democratic primary between Rep. Meek and Rep. Brown.

The telephone survey of 500 likely voters had a margin of error of 4.5-percentage points.

The poll’s results in the U.S. Senate race are consistent with results from other pollsters. Earlier in the month, Quinnipiac University released a poll showing CFO Sink with a four-point lead over Attorney General McCollum.

Politics: House Speaker Larry Cretul Appoints Committee to Address Allegations Against Rep. Sansom
On June 26, 2009, state House Speaker Cretul (R-Ocala) appointed the Select Committee on Standards of Official Conduct, chaired by Rep. Bill Galvano (R-Bradenton), to address findings of probable cause relating to official misconduct of Rep. Ray Sansom (R-Ft. Walton Beach). The speaker’s action followed the release earlier the same day of a report from House Special Investigator D. Stephen Kahn.

Mr. Kahn, a former Florida Senate General Counsel, found probable cause to believe that several actions by Rep. Sansom violated House rules that require members to perform their duties with integrity, in compliance with law, and in a manner that promotes public confidence in the integrity of the House. The investigator’s report included three specific allegations relating to Rep. Sansom’s involvement in the creation of a high-level position for himself at Northwest Florida State College, his involvement in directing state funding to the college, and his involvement in a private meeting of a public body, which would violate the open meetings law.

The select committee can recommend that the full House take actions against Rep. Sansom if it finds that he violated House rules.

Rep. Sansom chaired the House budget committee from 2006 – 2008 and was elected by his colleagues to serve as Speaker of the House on November 18, 2008; he resigned from that post on March 2, 2009. A Leon County grand jury indicted Rep. Sansom and the college president on charges of official misconduct on April 17, 2009.

Growth Management: “Hometown Democracy” Constitutional Amendment Certified for 2010 Ballot
The Florida Secretary of State certified on June 22, 2009 that the so-called “Hometown Democracy” proposed amendment to the Florida Constitution would appear on the November 2010 general election ballot. State election official found that proponents of the amendment had submitted 698,562 valid signatures, or about 22,000 more than were needed to get the amendment on the ballot.

The proposed amendment would require a referendum before a city or county could change its comprehensive plan. Supporters of the amendment say it will limit the role of developers in the political process and prevent overbuilding and uncontrolled growth. Opponents argue that it would place almost all large development plans before the voters and, in the words of Mark Wilson, president of the Florida Chamber of Commerce, “could mean a permanent recession for Florida’s economy.”

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