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From the staff of the Tampa Bay Times

Fasano: Timing of Heritage insurance deal, takeout letters 'highly suspicious'

Rep. Mike Fasano is the latest official to raise questions about a $52 million take-out deal between an upstart St. Petersburg insurance company and Citizens Property Insurance Corp.

Fasano, R-New Port Richey, penned a letter to the state’s Insurance Commissioner on Friday questioning whether Heritage Property and Casualty Insurance has already violated a May 17consent order from the Office of Insurance Regulation. Heritage has firmly denied the accusation. 

Fasano alleged that Heritage had been contacting insurance agents and policyholders prior to May 23, when the company officially received approval to take out some 60,000 policies in a $52 million deal. That would be a violation of the OIR’s consent order, Fasano said, citing a part of the agreement that bans Heritage from contacting “any potential policyholder, including sending communication regarding this depopulation” prior to the deal being signed. 

Heritage firmly denies that it has been contacting policyholders, and said the company contacted agents last week as part of a standard procedure to alert them to an upcoming potential takeout. The company’s chairman, Bruce Lucas, said there was nothing untoward about that. 

“We are required to publish a wishlist,” of policies, he said. “We contact agents and say, ‘In the future we attempt to do a depopulation’.” 

McCarty’s office did not immediately respond to a request for clarification about the rules on when a takeout company can contact agents. 

Lucas said the company only began sending letters to homeowners today, after receiving consent from OIR.

As evidence, Fasano presented a letter and email received by Pasco County Supervisor of ElectionsBrian Corley with regards to a takeout offer from Heritage. A May 17 letter from Corley’s insurance agent informs him that Heritage has “selected” his policy for an “upcoming takeout.” The proposed takeout was approved by Citizens' board of governors on May 22, in a 3-2 vote. Corley received an email response from a Heritage employee on May 22, prior to the vote, saying that Heritage “offers a better policy” than Citizens. 

Heritage has maintained that this was an “automated” message in response to Corley, and OIR general counsel Belinda Miller said she did not believe this form of communication violated the consent order’s ban on communicating with policyholders prior to approval of the takeout. 

Fasano’s letter to McCarty blasts the $52 million cash deal as a “blatant case of corporate welfare” and points out that Heritage’s CEO has run companies with several insurance violations in the past. Those violations include “failure to pay claim timely,” using unlicensed insurance professionals and making “misleading” advertisements. 

“Do we really want an insurance executive whose takeout company has been fined for using unlicensed agents?” Fasano wrote. 

Heritage said the CEO, Richard Widdicombe, resigned from People’s Trust in 2009 after noticing the violations, and helped regulators to investigate. 

Fasano’s letter came just hours after former state Sen. Dan Gelber wrote a letter to Gov. Rick Scott about the $52 million deal. Gelber urged Scott to return $110,000 Heritage donated to the governor’s reelection campaign effort. 

Scott’s office did not immediately respond to a request for comment, but the governor’s chief of staff has denied that Scott influenced the board of Citizens on behalf of a political contributor. 

See the letter from Fasano hereDownload FasanoLettertoOIR_HeritageDeal_5.24.13

 

[Last modified: Friday, May 24, 2013 3:16pm]

    

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