Bogdanoff: State better off canning Citizens, assuming 'cane-only risk
Hurricane season is a few months off, but it's at the forefront of lawmakers' worries.
Former insurance agent Rep. Ellyn Bogdanoff, R-Fort Lauderdale, this morning tried to convince a group of fellow House members that the state -- and taxpayers -- are better off "dismantling" Citizens and the CAT fund and having insurers in the private market turn over all hurricane insurance policies to a new state-operated fund that consists of just hurricane policies. Her bill (HB1157) hasn't yet gone to a committee vote. Pasco lawmaker Mike Fasano has it in the Senate.
Bogdanoff said by taking on the "one risk" that is keeping large private insurers like Nationwide away, it will entice those insurers to return to Florida to offer other important property owner policies like flood and fire. "If other companies come in to cover the other stuff, those rates will go down, and it will offset what happens in the hurricane insurance fund," Bogdanoff said.
But some, including Reps. Alan Hays and Jim Waldman, were skeptical. There are lots of questions about the cost to the state of initial funding and bonding to cover, say, a once-in-100-years storm.
"If Citizens and the CAT fund are a problem, this here is a problem on steroids," said Hays, R-Umatilla. "Taking on the worst risk and letting private companies have the easier risk seems to me like saddling the people of Florida with too much."
Bogdanoff later conceded to Hays that the best scenario would be "dismantle Citizens, dismantle the CAT fund, let the free market return and rates go up 60 percent. But if you can do that politically, you're my hero."
Shannon Colavecchio, Times Staff Writer