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Insurance companies are so heavily regulated that they are practically an extension of the government already. The state of Florida is giving them a discounted reinsurance and the savings must be passed on to customers. Citizens Insurance is owned by the state and it does have poor service, but it is the insurer of last resort.

30 posted on 03/09/2007 7:23:48 AM PST by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)

"The state of Florida is giving them a discounted reinsurance and the savings must be passed on to customers."

Right, The reinsurance is backed by state bonds with 1.35 billion outstanding. This is not reinsurance but a shift for all losses from solvent free market insurer's to the state who backs the bonds. Currently Citizens has a negative surplus of 175 million and they are cutting the rates. This deficit is finance by more gov bonds. This rate cut will drive most of the buyers to Citizens which will have to issue more bonds if a large loss occurs.

Bottom line is if a huge storm hits you and your state will be forced to raise taxes to pay the bond holders.

Markets work even in insurance unless the government is run by a RINO.