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Florida’s domestic property insurance companies are opposing a bill on Gov. Charlie Crist’s desk that would deregulate rates for a few large national carriers but leave their own rates subject to state regulation.

Gov. Crist has until June 27 to either sign or veto the measure (HB 1171) that supporters hope will convince State Farm, which has announced plans to leave the state, and other large national carriers to write property risks in the state.

But the Florida Property & Casualty Association (FPCA), which says it represents Florida-based insurers writing 40 percent of the market, is urging Crist to veto the measure, arguing that it is an “unbalanced and dangerously fragmented approach to deregulation” and that it will have “long term negative” consequences for consumers and businesses.

The measure would create a “bifurcated and unlevel insurance market where large insurers and smaller Florida domestic insurers would be governed by diametrically opposed sets of rules,” the FPCA wrote in a letter to Crist signed by Roger Desjadon, CEO, Peninsula Å˽ðÁ«´«Ã½Ó³»­ Co. Under this system, large insurers could “cherry pick” risks and effectively redline by offering excessively high rates in areas where they really do not want to write business, while other insurers would be restrained from competing in an open market, according to the FPCA.

The result will be more risks placed in the state-backed Citizens Property Å˽ðÁ«´«Ã½Ó³»­ Corp. and more exposure to assessments by Citizens and the state hurricane fund for all policyholders, FPCA wrote.

The FPCA says it supports a competitive marketplace but not the approach taken by this bill.

Crist has been under pressure from both sides in the debate over HB 1171.

Supporters, including state Rep. Bill Proctor of St. Augustine, say the measure simply gives some consumers the option of buying their insurance from large, well-capitalized insurance companies at likely higher rates. The bill also promises to build claims-paying capacity by keeping State Farm and other large carriers in the state, according to Proctor, who has expressed concern about the financial ability of the smaller domestic carriers to withstand the state’s hurricane-prone environment.

The state Chamber of Commerce reported that a poll showed public support for the bill.

Consumer groups including the Consumer Federation of the Southeast have urged Crist to veto the bill, arguing that it would create “the same dangerous deregulated environment that led to the collapse of the nation’s financial markets by allowing the largest insurance companies to raise rates without state approval.”

Walter Dartland, executive director, Consumer Federation of the Southeast, said the bill would allow major property insurance carriers to push the highest-risk customers onto Citizens Corp. and onto smaller Florida-based companies that are not allowed to charge the same rates.

“This amounts to another bailout– this time for major insurance companies as they attempt to cherry pick the market by pricing their way out of the areas they don’t want to serve,” charged Dartland.

Crist, who is running for the Republican nomination for the U.S. Senate, has indicated he is likely to veto the measure, which is also opposed by Å˽ðÁ«´«Ã½Ó³»­ Commissioner Kevin McCarty who shares some of the concerns raised by the domestic carriers.

The Florida Association of Independent Agents (FAIA) did not endorse HB1171.