Make us your home page

House panel examines controversial Citizens loan deal

TALLAHASSEE — A controversial plan to loan $350 million to established private insurers to take out policies from the state-backed Citizens Property Insurance Corp. made its legislative debut Tuesday to an inquisitive House panel that will oversee insurance issues.

Responding to concerns raised over a program first announced earlier this fall, Citizens executives walked members of the House Insurance & Banking Subcommittee through the details of a plan that backers say could reduce Citizens' ranks by up to 300,000 policies

Subcommittee members, meeting for the first time, called on Citizens to take even more aggressive action to reduce the number of policyholders in the state-backed entity that now insures nearly 1.5 million homes, condos and businesses.

Proposals ranged from making new Citizens customers pay much higher rates to re-examining the use of surplus-lines carriers and allowing newly formed companies to qualify for cash incentives and loans.

"I think we need to do everything we can to make Citizens smaller," said Rep. Bill Hager, R-Boca Raton.

Earlier this year, Citizens' board of governors approved a plan to provide $350 million in low-interest loans to companies willing to take out policies from Citizens and keep them for at least 10 years.

The proposal, available only to qualified, existing companies, has been temporarily sidetracked after legislative leaders and critics complained the deal was moving too fast and had not been property vetted.

Sharon Binnun, Citizens' chief financial officer, said the insurer continues to stand behind the program and is formulating a similar effort aimed at new companies that may not have an existing insurance track record but have the financial capability to take policies from the state-backed pool.

Subcommittee Chairman Bryan Nelson, R-Apopka, said lawmakers will look at myriad options to reduce the growth of Citizens, which despite shedding nearly 250,000 existing policies this year, continues to grow, in part because of attractive premiums that, depending on the region, can be far cheaper than private insurance.

Nelson faces skepticism within his own panel from coastal members who represent regions in which Citizens coverage is the only game in town. Shrinking Citizens' base, though financially beneficial in the long run, could hurt coastal homeowners and put pressure on lawmakers. It's a political hot potato.

Many inland lawmakers, however, say Citizens is a house of cards that will blow down if a severe storm hits, resulting in statewide assessments that will cost all insurance customers regardless of where they live.

"I am not going to let Miami-Dade County bring down the rest of the state," said Rep. John Wood, R-Haines City.

House panel examines controversial Citizens loan deal 12/04/12 [Last modified: Tuesday, December 4, 2012 8:04pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. 'Toxic' times: How repeal of Florida's tax on services reverberates, 30 years later

    State Roundup

    TALLAHASSEE — Long before Hurricane Irma attacked Florida, the state faced a troubled fiscal future that the storm will only make worse.

    Robertson says the tax debate is now “toxic.”
  2. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]
  3. 'What Happened'? Clinton memoir sold 300,000 copies in first week


    Despite being met with decidedly mixed reviews, What Happened, Hillary Clinton's new memoir about the 2016 presidential campaign, sold a whopping 300,000 copies in its first week.

    The new memoir by former presidential candidate Hillary Clinton sold 300,000 copies in its first week.
  4. After Irma topples tree, home sale may be gone with the wind

    Real Estate

    ST. PETERSBURG — To house hunters searching online, the home for sale in St. Petersburg's Shore Acres neighborhood couldn't have looked more appealing — fully renovated and shaded by the leafy canopy of a magnificent ficus benjamini tree.

    Hurricane Irma's winds recently blew over a large ficus tree, left, in the yard of a home at 3601Alabama Ave NE, right, in Shore Acres which is owned by Brett Schroder who is trying to sell the house.
[SCOTT KEELER   |   Times]

  5. Unemployment claims double in Florida after Hurricane Irma


    The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

    Homes destroyed by Hurricane Irma on Big Pine Key last week. Hurricane Irma continued to have an impact on the job market in Florida, where unemployment claims more than doubled from the previous week.
[The New York Times file photo]