Make us your home page
Instagram

House committee gives Citizens insurance a hard look

Don Brown felt he had to say it.

"Millions of Floridians are unaware that they are just one hurricane away from the equivalent of a massive tax increase," Brown told the Florida House Committee on Insurance on Friday. "I think people deserve to know that.''

A DeFuniak Springs Republican, the committee chairman and an insurance agent, Brown and his colleagues spent five hours asking executives from state-backed Citizens Property Insurance Corp. what would happen if the state was hit by a major hurricane, and who would pay for it.

The response from Citizens was that Florida policyholders would be liable for more than $10-billion in assessments if a one-in-100-year storm struck the state.

The amount would be paid by policyholders over 30 years and would be in addition to assessments charged by the state's catastrophe fund.

Under current law, all Florida home and auto owners can be assessed if Citizens runs a deficit, as it did after the storms of 2004-05. Floridians are paying more than $800-million over 10 years to cover those losses.

The likelihood of more assessments has grown, Brown argued, because as Citizens' exposure to risk continues to grow, its rates haven't increased since late 2005 and will remain frozen until January 2009. A bill in the Senate would tack on another year of the rate freeze.

Citizens actuary Paul Erikson estimated the company will lose about $120-million a year in uncollected premiums in its high-risk account because of the freeze.

Asked if Citizens has had inadequate rates since 2007, when the freeze went into effect, Erikson replied, "Yes."

Unlike last month's Senate hearings with Allstate, Nationwide and the Hartford, the tone this time was non-combative.

Committee members had nothing but praise for Citizens and its 1,000-member staff, which is about a fourth the size of a comparable private company.

But the company has had to be nimble. The Florida Legislature last year changed insurance law in three critical areas. The state's catastrophe fund was increased so that private insurers would have more access to cheaper back-up coverage, with the savings to be passed on to policyholders.

And in addition to freezing its rates, Citizens was allowed to have rates competitive with private carriers.

Brown would like to see those last two parts undone, if not the entire package.

"There's an old saying that when you find yourself in a hole, the first thing you need to do is stop digging,'' he said. "(Citizens) financial picture is better today than ever before, but not in the event of a one-in-100-year storm. Shouldn't we stop digging?"

Citizens chief financial officer Sharon Binnun smiled. "We look to the Legislature for direction,'' she said, "and do the best we can.''

Brown is not without his critics. State Sen. Mike Fasano, R-New Port Richey, a member of the Task Force on Citizens Claims Handling and the Senate's select committee on insurance, said that if Florida was hit by a Katrina-like storm, "Yes, there will be assessments. But every other insurance company in Florida will be hurting, too.''

"I'm disappointed that (House) Speaker (Marco) Rubio allowed this type of exhibition to go on in the Florida House. Rep. Brown can talk about Citizens premiums not being high enough, but a lot of Floridians can't afford it now.''

One of two lawmakers to vote against the 2007 legislative changes, Brown said he will schedule another meeting in the coming weeks to revisit the issue.

Tom Zucco can be reached at zucco@sptimes.com or (727) 893-8247.

House committee gives Citizens insurance a hard look 03/14/08 [Last modified: Monday, March 17, 2008 2:08pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. In advertising, marketing diversity needs a boost in Tampa Bay, nationally

    Business

    TAMPA — Trimeka Benjamin was focused on a career in broadcast journalism when she entered Bethune-Cookman University.

    From left, Swim Digital marketing owner Trimeka Benjamin discusses the broad lack of diversity in advertising and marketing with 22 Squared copywriter Luke Sokolewicz, University of Tampa advertising/PR professor Jennifer Whelihan, Rumbo creative director George Zwierko and Nancy Vaughn of the White Book Agency. The group recently met at The Bunker in Ybor City.
  2. Tampa Club president seeks assessment fee from members

    News

    TAMPA — The president of the Tampa Club said he asked members last month to pay an additional assessment fee to provide "additional revenue." However, Ron Licata said Friday that the downtown business group is not in a dire financial situation.

    Ron Licata, president of the Tampa Club in downtown Tampa. [Tampa Club]
  3. Under Republican health care bill, Florida must make up $7.5 billion

    Markets

    If a Senate bill called the Better Care Reconciliation Act of 2017 becomes law, Florida's government would need to make up about $7.5 billion to maintain its current health care system. The bill, which is one of the Republican Party's long-promised answers to the Affordable Care Act imposes a cap on funding per enrollee …

    Florida would need to cover $7.5 billion to keep its health care program under the Republican-proposed Better Care Reconciliation Act of 2017.  [Times file photo]
  4. Amid U.S. real estate buying binge by foreign investors, Florida remains first choice

    Real Estate

    Foreign investment in U.S. residential real estate recently skyrocketed to a new high with nearly half of all foreign sales happening in Florida, California and Texas.

    A National Association of Realtors annual survey found record volume and activity by foreign buyers of U.S. real estate. Florida had the highest foreign investment activity, followed by California and Texas. [National Association of Realtors]
  5. Trigaux: Tampa Bay health care leaders wary of getting too far ahead in disruptive times

    Business

    Are attempts to repeal Obamacare dead for the foreseeable future? Might the Affordable Care Act (ACA), now in dire limbo, be revived? Will Medicaid coverage for the most in need be gutted? Can Republicans now in charge of the White House, Senate and House ever agree to deliver a substitute health care plan that people …

    Natalia Ricabal of Lutz, 12 years old, joined other pediatric cancer patients in Washington in July to urge Congress to protect Medicaid coverage that helped patients like Ricabal fight cancer. She was diagnosed with Ewing's sarcoma in 2013 and has undergone extensive treatments at BayCare's St. Joseph's Children's Hospital in Tampa. [Courtesy of BayCare]