INDIANAPOLIS (July 25, 2007) – The National Association of Mutual Insurance Companies (NAMIC) issued the following statement in response to comments expressed by Florida Insurance Commissioner Kevin McCarty in a statement sent to Florida newspapers. The following comments may be attributed to Liz Reynolds, NAMIC’s southeast state affairs manager:
“Once again, Florida’s governing administration has demonstrated its inability to comprehend or appreciate the realities of the state’s insurance situation, as evidenced by Commissioner Kevin McCarty's comments regarding companies' need to increase rates through the 'true-up' process required by the special session legislation.
"The chief concern among Florida’s insurers is that they remain solvent. Assuring they have the money to pay claims when needed is the best way insurance companies – and the state – can protect those they insure.
"Forcing insurers to charge rates that are inadequate to cover future losses solely to achieve short-term rate decreases jeopardizes the solvency of Florida Farm Bureau Insurance Companies and other companies. These decreases or rate freezes serve only to mask the true cost of risk.
"The legislation that passed in the special session and Commissioner McCarty’s expectations equate to a short-term fix that’s a house built on sand. And when the rains come down and floods come up, that house will come tumbling down. Instead, insurers need to have adequate rates and appropriate reinsurance to best protect policyholders from the risks they face.”
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Posted: Wednesday, July 25, 2007 12:00:00 AM. Modified: Wednesday, July 25, 2007 11:02:31 AM.
317.875.5250 - Indianapolis | 202.628.1558 - Washington, D.C.