A preemptive strike by Florida's governor and cabinet is freezing insurance rates and halting cancellations.
However, some worry the moratorium could do more harm than good.
Governor Charlie Crist started the day with another shot across the bow of the insurance industry. He pushed through an emergency order freezing insurance rates and banning companies from dropping customers.
"We have a duty to protect the people of Florida," Governor Crist said Tuesday.
During the cabinet meeting at which Crist’s emergency order was approved, the governor lashed out at insurance company lobbyists who tried to protest. "I just think fundamentally it’s unfair. I don’t think the people of Florida would agree with your assessment that it’s unfair. They’ve had rate increase, after rate increase, after rate increase and they are sick and tired of it and they can’t afford it any more."
But even though support for the emergency order was unanimous, the three cabinet members beside the governor remain concerned what they did could have unintended consequences.
Chief Financial Officer Alex Sink says Florida may be scaring away the very insurance companies it hopes to lure here by telling private industries how it should do business. "To have this government intervention, it really concerns me."
Chastised Insurance Lobbyist Mark Delegal confirmed the moratorium is not likely to encourage new insurance business. "I think it’s a terrible, just philosophical anti-free market approach."
But now, it’s personal for Crist. His own parents got a non-renewal notice last week, and he says the bigger concern is making sure homeowners have coverage going into this year’s hurricane season.
The emergency rule banning insurance companies from raising rates or dropping policies is in effect for 90 days or until the new insurance relief law takes effect this spring.
The new law will then extend the moratorium on policy non-renewals and cancellations until the end of hurricane season November 30th.