As I always like to observe, irony is often very delicious and this is one of those times. For instance our contributor Proximo, stopped in yesterday attempting to slather some lip stick on the time honored myth that insurers compete in an unfettered free market without mentioning the anti trust exemption enjoyed by the industry or the artificial fragmentation of the insurance market by state. Though low level economic theory does not make for a delicious irony we are left to consider the question raised by Proximo. Are certain retail insurers greedy? And what in the hell was the Farm thinking asking for a 47% rate increase in Florida last month?
To catch our readers up the Florida wind insurance market is best described by the term debacle. In a bid to keep rates there semi affordable Gov Crist and the legislature passed a law that essentially made the State of Florida it’s own re-insurer. It then sold the reinsurance on the cheap to the retail outlets like Allstate and the Farm in exchange for them passing the savings along to the policyholder. Allstate promptly proceeded to file a large rate increase after buying the cheaper re-insurance, however. State Farm followed suit but quickly withdrew the request when Florida Insurance Commissioner McCarty ordered rate hearings. Allstate stuck to their guns finally settling out with the Florida Office of Insurance Regulation (FLOIR) Friday afternoon. More on that in a bit.
Against this backdrop it is worth nothing the State of Florida is essentially the state’s largest insurer through Citizen’s insurance. Frankly I’m surprised there isn’t more on this financial house of cards in the Florida blogosphere. Florida based Folo blog moderator Lotus for instance, took to blegging for money Continue reading “Some Good Neighborly Greed From the Good Hands People Part 1: Can the Slabbed Help Get Lotus Off Her Knees?”