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From the staff of the Tampa Bay Times

Weatherford 'highly concerned' about $52 million deal for Heritage Insurance

The list of lawmakers criticizing Citizens Property Insurance Corp. for a $52 million takeout deal continues to grow, as House Speaker Will Weatherford said Friday that he had "serious concerns" about the plan.

Weatherford, R-Wesley Chapel, said Citizens did not provide sufficient notice to the Legislature before quickly approving the $52 million deal that was unveiled and voted on this week.

"I have serious concerns about the latest takeout agreement between Citizens and the Heritage Property and Casualty Insurance Company, particularly the lengthy backdated payments for coverage that Heritage did not provide," Weatherford said in a statment. "Once again, Citizens did not provide a sufficient advanced briefing to the Legislature, and the proposal was hastily pushed through a sharply divided board."

Last year, Weatherford chided Citizens for attempting to loan out up to $250 million from its cash surplus to smaller private insurance companies. Citizens eventually abandoned the effort, but decided to go ahead with plans to pay companies cash for taking over policies in a unique retroactive reinsurance agreement.

Weatherford joins Rep. Mike Fasano (R-New Port Richey), Gov. Rick Scott,  Rep. Frank Artiles (R-Miami) and former state senator Dan Gelber (D-Miami Beach) in slamming Citizens for the deal. 

Weatherford said the deal, which passed on a 3-2 vote less than a week after it was unveiled, was "hastily pushed through a sharply divided board."

Citizens has defended the deal, calling it a "compelling" opportunity to shed more than $400 million in risk, should a one-in-100-year storm hit the state.  

Still, the company has drawn criticism from state lawmakers who say they were not informed about the deal. Weatherford said that the Legislature passed a "comprehensive insurance bill" earlier this month that would help Citizens shed policies without giving companies cash incentives.

His statement goes on to blast Citizens about "their lack of understanding that Citizens has a greater responsibility to the public."

See Citizens' full statement on the deal here

“This is a great opportunity to place another 60,000 policies into the hands of one of the most  well capitalized companies in the Florida marketplace,” said Citizens President and CEO Barry Gilway. “I think the logic behind this agreement is compelling.” 

After initially saying the $52 million deal was "not special," Scott's office called the board "tone-deaf" for approving it. Fasano called the deal a blatant example of "corporate welfare" and Artiles called it a "get rich" scheme for the 9-month-old Heritage.

See Weatherford's full statement below:

"I have serious concerns about the latest takeout agreement between Citizens and the Heritage Property and Casualty Insurance Company, particularly the lengthy backdated payments for coverage that Heritage did not provide. Once again, Citizens did not provide a sufficient advanced briefing to the Legislature, and the proposal was hastily pushed through a sharply divided board.

Just a few weeks ago, we passed a comprehensive insurance bill with bipartisan support aimed at responsibly reducing the number of Citizen policies at no cost.

While we want to provide the legislatively created Citizens Insurance Corporation the flexibility to take advantage of ideas and initiatives that will reduce risk to Florida, there is a growing concern about their lack of understanding that Citizens has a greater responsibility to the public.

During the interim, I have asked Chair Doug Holder and the Regulatory Affairs Committee to review the laws governing Citizens to ensure that they are clear and appropriate."

 

 

[Last modified: Friday, May 24, 2013 5:50pm]

    

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