The Citizens Mission Review Task Force made a significant recommendation at its meeting on Tuesday. Prior testimony was that the average Florida rate hike, which would be approved by the Office of Insurance Regulation, would almost certainly be higher than 30%. We recommended to the Florida Legislature that they to pass a statute to cap that rate increase at 10%. Without this law, the rate would probably go up over 30% on a statewide basis.
So, what do you think a proper headline would be in a newspaper article reporting on this outcome? "Panel Votes to Cap Rates?" "10% Maximum Rate Increase Proposed?" How about, "Panel Says No to Unlimited Rate Increases?"
By Jingo, no way! Newspaper editors must think they need headlines full of sensationalism and fear to catch a reader’s attention. These were some of the headlines I found on a Google search on Wednesday morning:
Citizens Property Insurance Plans to Increase Rates
State Panel Backs Rate Hike of up to 20 Percent for Citizens Insurance
Citizens Should Hike Insurance Rates, Task Force Says
Hike Citizens Property Insurance Corp’s Premiums, Florida Panel Urges
We never found that the rates should be hiked. Instead, a bunch of experts explained why they thought a "fair" rate was going to result in a huge increase because Citizens has been charging an amount of premium that is not "sound." Even the Florida Office of Insurance Regulation indicated that a fair rate for Citizens was one that could have an increase above 30%.
In 2006, the Florida Legislature froze Citizens rates to combat skyrocketing premiums. The Legislature then passed a law mandating that Citizens had to charge "actuarial sound rates" by January 1, 2010.
I never voted to raise rates. I advocated and then argued for the cap because I felt it was going to make insurance unaffordable for many if the rates jumped overnight.
Some panel members argued against that, but eventually voted for the caps as well. Their view was that the majority of Floridians pay a subsidy to Citizens policyholders, who are charged rates lower than what the consumer advocate calls a "fair" premium. Right now, Citizens Policyholders have the state-backed guarantee that they get paid their claims. Other policyholders with non-state subsidized insurance, pay higher but fair rates, do not have that same protection. If Citizens were a private company and not part of the government, experts told us that its rates would have to be significantly higher.
When I am hired to advocate a policyholder’s position, I try to cast my client in the best light possible. I am ethically bound to zealously argue positions to my client’s best benefit. It’s my job.
Newspapers have a responsibility to get it right. They should enlighten their readers with a factual recounting of the important issues of the day. That is a journalist’s job.
I have no problem with a sensational headline to sell newspapers–they need the business badly. However, headlines should be factually correct and not mislead.
