Once again the fate of the property insurance market appears to be completely in the hands of Charlie Crist.

Gov. Crist, who came into office promising to lower insurance rates for homeowners, will determine what (if any) property insurance legislation comes to fruition this year. His call to veto any legislation that includes rate hikes significantly affected how legislators dealt with the issue.

Lawmakers early on during the 2010 session jettisoned plans to push a full-blown deregulation or "consumer choice" bill out of fear that Crist would veto the legislation like he did in 2009. However, the lingering question throughout the session was whether the final product that lawmakers come up with will pass muster.

Crist has acknowledged there are some "good things" in some of the comprehensive insurance industry bills, but he said that what he winds up doing depends on a review of the final legislation.

Grave Consequences

A deep level of mistrust descended on the Capitol in April after Crist vetoed bills dealing with campaign finance and education that were top priorities of legislative leaders. Republican legislative leaders made it clear that they did not wish to pass anything that Crist could veto and then use to appeal to voters.

"I would tell you that all of us are quite aware of the Governor's threat to veto the bill," said Sen. J.D. Alexander (R-Lake Wales), and one of the top Republicans in the Florida Senate.

Alexander complained that Crist is not taking seriously the fragile nature of Florida's property insurance market and the need to let insurance companies raise rates. Alexander asserted that without more private companies in Florida too much risk will fall on the state-created entities such as Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund, both of which can place a surcharge on most insurance bills if they have major losses.

"When we have a hurricane it will be clear that these policies have been unsound and have grave financial consequences for the people of Florida," he said.

Willing to Give Up Rate Hikes

Lawmakers spent much of their session debating over how large a rate hike should be given to insurers without regulatory review, while another approach called for giving the industry the ability to raise rates on an expedited schedule as long as it was to cover the cost of reinsurance or was tied to an inflationary index developed by state regulators.

What got lost in the back and forth over insurance rates is that the industry was just as concerned about other issues contained in comprehensive property insurance legislation. They were more than willing to give up open-ended provisions on rate hikes in order to address cost drivers that they say have cost insurers money.

"Florida has been lucky to escape the past few hurricane seasons without a major catastrophic storm," said Bob Ritchie, president and CEO of American Integrity Insurance Co. in Tampa. "But good luck isn't an effective strategy for protecting the people of Florida, their homes and businesses. Good legislation is necessary to allow the industry to continue building the private capital reserves we need to adequately cover Florida."

Ritchie added, "We've got issues we need to address in the future as respect to rates but we need to galvanize" behind the other items included in the comprehensive property insurance bills.

Some of the elements that insurers wanted to see in Florida law included new limits on how long a homeowner can wait before filing a claim and additional measures meant to discourage frivolous sinkhole claims. They also wanted to address the role of public adjusters.

Another major change would alter how insurers handle replacement costs for both structural damage and for personal contents. The idea is that the policyholder would get paid if there was a total loss, but that there would be requirements in some instances to require the homeowner to show proof that he was using a claim payment to rebuild or replace what was lost.

Some legislators questioned the change in law, contending that it was anti-consumer. The wording of the legislation also drew fire from newspaper editorials, which could factor into how Crist responds.

However, insurance executives said Florida's hurricane exposure requires the need for regulations that do not discourage companies spending capital in the state.

"This is why there needs to be a balancing act, so that ill-conceived regulations don't drive capital out of the state at the very time when we need it most," said Jay Newman, chairman of Sawgrass Mutual Insurance Co. in Davie.