Hey, insurers got big tax cuts. Florida must cut rates, advocates say

Insurance companies stand to reap a windfall from federal tax cuts but will overcharge customers by an estimated 5 percent or $25 billion unless regulators in Florida and other states take action, a national consumer group says.

J. Robert Hunter, director of insurance for the Consumer Federation of America

“When their corporate taxes go down, insurance companies need less premium, so their rates must come down,” said J. Robert Hunter, the Consumer Federation of America’s director of insurance, a former Texas insurance commissioner and past adviser to Florida regulators. “But unless commissioners ensure that companies lower their rates, drivers, homeowners, and businesses will be stuck overpaying for coverage.”

The group sent letters to insurance commissioners in every state including Florida’s David Altmaier. Florida has the nation’s costliest average home insurance premiums, according the National Association of Insurance Commissioners.

Florida’s Office of Insurance Regulation will “carefully consider” the issue, a spokeswoman said in a statement requested by The Palm Beach Post.

“The Office has reviewed the letter from the Consumer Federation of America and the Center for Economic Justice and appreciates their comments,” an OIR statement said. “As with any development that potentially affects rates, the Office will carefully consider the impact of all of the provisions of the Tax Cuts and Jobs Act of 2017 on insurance rates for Florida consumers.”

CFA’s estimates for consumer savings after tax changes are not necessarily shared by the industry. For their part, insurers in Florida have been focusing more on changes in state law they say are needed to curb claims inflated by contractors and lawyers.

The Florida House passed HB 7015 by Rep. Jay Trumbull, R-Panama City, which makes changes insurers want relating to assignment of benefits and the award of legal fees in property insurance cases.

“It provides meaningful reforms to address the issues of skyrocketing litigation and assignment of benefit abuse that raise rates for our customers,” said Christine Ashburn, chief of communications, legislative and external affairs for state-run Citizens Property Insurance Corp.

Senate legislation would change some rules on AOB but has other provisions insurers do not support, raising the possibility the issue will deadlock again as it has for several years.

Asked about the tax-savings issue, a spokeswoman for the state’s Chief Financial Officer Jimmy Patronis said he “has been an ardent supporter of lowering insurance rates in Florida including working this legislative session to fix the multi-faceted AOB fraud problem in the state. He will continue to support opportunities to lower insurance rates for Florida families.”

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