CFO Atwater raises questions about $52 million deal with Heritage Insurance
Chief Financial Officer Jeff Atwater has weighed in on Citizens Property Insurance’s $52 million deal with an upstart St. Petersburg firm, suggesting that the transfer was “not thoroughly vetted.”
Atwater joins several other top Florida officials in questioning Citizens over the deal, which benefits nine-month-old Heritage Property and Casualty Insurance. The proposal was unveiled and approved last week in a quickly scheduled 3-2 vote by Citizens’ board. Two board members could not make it to the meeting and another abstained from voting, allowing the proposal to carry with the support of only three of Citizens' eight board members.
“Citizens must recognize that making significant financial decisions on behalf of Floridians deserves full and complete transparency,” Atwater said in a statement provided by a spokesperson.
Heritage, which donated $110,000 to Gov. Rick Scott’s reelection campaign in March, will receive up to $52 million from Citizens’ $6.4 billion surplus, part of a unique retroactive reinsurance deal. The company will take over as many as 60,000 policies from the state-run insurer.
The deal has sparked criticism from House Speaker Will Weatherford, Rep. Mike Fasano (R-New Port Richey), Rep. Frank Artiles (R-Miami) and former state senator Dan Gelber (D-Miami Beach). Weatherford pledged to have his Regulatory Affairs chair conduct a thorough review of Citizens. Scott’s chief of staff called the board “tone-deaf” and the governor’s office said Scott did not influence the board to act on behalf of his political contributor. A board member appointed by Scott made the motion to approve the deal.
Atwater also has two appointees to the board, and selects the chair of the board. One of Atwater’s appointees voted for the deal, while another voted against it. The chair voted to support the deal, and was responsible for calling the meeting to approve the deal, only days after it was unveiled.
Atwater’s statement appears to take issue with the way the deal was rapidly approved, not necessarily with the deal itself.
“Transactions structured to benefit policy holders and taxpayers will pass tough scrutiny and analysis when vetted in public meetings with notification provided to all stakeholders in a timely fashion,” he said. “When proposals are not thoroughly vetted the casualties become the public’s confidence in the institution’s decisions and practices. Citizens must make their practices and processes as open and accessible to the people of Florida as it does for the insurance industry.”
The deal is also controversial because Heritage’s president, Richard Widdicombe, has run two insurance companies in Florida that faced sanctions from regulators for breaking insurance rules. One of those companies, People’s Trust, was fined $100,000 by the Department of Financial Services in 2009, over allegations that it used unlicensed professionals to sell insurance products. It was one of the largest fines ever levied by DFS against an insurer. Widdicombe resigned from the company in early 2009, while regulators were investigating the misconduct.
Elected in 2010, Atwater now oversees the Department of Financial Services.