Rethink Government's Role in Insurance Regs

The editorial "Property-insurance reform package could harm consumers" (OrlandoSentinel.com, Feb. 5) is a reminder of an alarming fact: Despite five hurricane-free years, Florida's insurance market is still in shambles.

More than half the property insurers are losing money even without hurricanes, fewer insurance companies are competing, financial stability is reduced, and the state-owned property insurance company has grown to be the largest insurer in Florida.

The best solution to these issues requires a fundamental rethinking of government's role in insurance regulation. Government should not dictate insurance rates, but rather level the playing field by fighting fraud and ensuring that companies selling policies in Florida are able to pay customers' claims.

The property-insurance reform bill before the Legislature is a first step to addressing some of these problems. Insurance is not meant to be a lottery jackpot; it is meant to indemnify policy holders — to restore property after a covered loss to what it was at the time the policy was executed. Mandating that repairs be made before full payment of claims reduces fraud and is already the law in most states.

Granting private companies the flexibility to slightly raise or lower their rates would allow them to compensate for market forces such as inflation without triggering the most onerous bureaucratic rate-filing process in the country. This would entice more companies to re-enter the Florida market and increase competition to the benefit of consumers.

Christian R. Cámara Florida Insurance Project Director, Heartland Institute