Friday, November 17, 2017

Citizens' corporate welfare puts consumers on hook


The state-run Citizens Property Insurance Corp. wants to make itself stronger by first making itself weaker. The insurer's board voted unanimously Friday to bribe private insurers with $350 million in sweetheart loans to take policies out of Citizens. That means Citizens initially will wind up with less reserves and riskier policies — and that homeowners will pay even higher rates for less coverage while private insurers make out like bandits. It is a flawed strategy that has failed before, and consumers should be outraged by this corporate welfare program.

Urged on by Gov. Rick Scott, Citizens is virtually giving away premium money paid by 1.4 million policyholders in order to shed policies. It reflects the typical Tallahassee thinking that government solutions are always bad and competition and the private market are always better solutions. The problem, of course, is that homeowners are hostages. They have to buy property insurance if they have mortgages, and private insurance remains unavailable or unaffordable — or both — in too many areas of the state.

In fact, Citizens is on a promising path after more than six years without hurricanes. It has a record surplus of more than $6 billion. It has the capability of paying claims from a 1-in-46-year hurricane. And it continues to raise premiums to up to 10 percent a year to gradually build more reserves and get closer to actuarially sound rates. Meanwhile, private insurers are expected to take the most policies from Citizens this year since 2008, including 150,000 by four carriers in November.

Yet Citizens has embraced a new loan program that is too generous to private insurers and has too few protections for consumers. Private insurers could borrow up to $50 million for 20 years at a below-market interest rate of just 2 percent. Yet the insurers only have to agree to take Citizens policies for 10 years, and they can raise policyholders' rates beyond 10 percent a year after three years. If that's not generous enough, there's this: If hurricanes do strike Florida, up to 20 percent of the loan could be forgiven each year for five years.

This is not a new idea. In 2006, the state used $250 million in general tax dollars to make loans to Florida-based insurers who cherry-picked the safest policies and minimally reduced Citizens' risk. In 2008, then-Gov. Charlie Crist vetoed a plan by the Legislature to hand $250 million from Citizens to start-up private insurers. The current governor has no similar interest in protecting consumers, and neither does the Citizens board.

On Friday, the Citizens board rejected efforts to add more protections to the loan plan. One board member even suggested allowing start-up companies to participate. And no public comment was allowed, at least until Sen. Mike Fasano, R-New Port Richey, interrupted on a phone line and asked why the board was so concerned about what the insurance industry wants.

That question went unanswered, but the silence said volumes.


Editorial: Good for Tampa council member Frank Reddick to appeal for community help to solve Seminole Heights killings

As the sole black member of the Tampa City Council, Frank Reddick was moved Thursday to make a special appeal for help in solving four recent murders in the racially mixed neighborhood of Southeast Seminole Heights. "I’m pleading to my brothers. You ...
Updated: 2 hours ago
Editorial: It’s time to renew community’s commitment to Tampa Theatre

Editorial: It’s time to renew community’s commitment to Tampa Theatre

New attention to downtown Tampa as a place to live, work and play is transforming the area at a dizzying pace. Credit goes to recent projects, both public and private, such as the Tampa River Walk, new residential towers, a University of South Florid...
Published: 11/17/17
Editorial: Rays opening offer on stadium sounds too low

Editorial: Rays opening offer on stadium sounds too low

The Rays definitely like Ybor City, and Ybor City seems to like the Rays. So what could possibly come between this match made in baseball stadium heaven? Hundreds (and hundreds and hundreds) of millions of dollars. Rays owner Stu Sternberg told Times...
Updated: 2 hours ago
Editorial: Wage hike for contractors’ labor misguided

Editorial: Wage hike for contractors’ labor misguided

St. Petersburg City Council members are poised to raise the minimum wage for contractors who do business with the city, a well-intended but misguided ordinance that should be reconsidered. The hourly minimum wage undoubtedly needs to rise — for every...
Published: 11/16/17

Editorial: Make workplaces welcoming, not just free of harassment

A federal trial began last week in the sex discrimination case that a former firefighter lodged against the city of Tampa. Tanja Vidovic describes a locker-room culture at Tampa Fire Rescue that created a two-tier system — one for men, another for wo...
Updated: 3 hours ago
Editorial: Firing a critic of his handling of the sewer crisis is a bad early step in Kriseman’s new term

Editorial: Firing a critic of his handling of the sewer crisis is a bad early step in Kriseman’s new term

Barely a week after St. Petersburg Mayor Rick Kriseman promised to unite the city following a bitter and divisive campaign, his administration has fired an employee who dared to criticize him. It seems Kriseman’s own mantra of "moving St. Pete forwar...
Published: 11/15/17
Updated: 11/16/17
Editorial: USF’s billion-dollar moment

Editorial: USF’s billion-dollar moment

The University of South Florida recently surpassed its $1 billion fundraising goal, continuing a current trend of exceeding expectations. At 61 years old — barely middle age among higher education institutions — USF has grown up quickly. It now boast...
Updated: 2 hours ago
Editorial: Vets should not have to wait years for benefits

Editorial: Vets should not have to wait years for benefits

American military members hurt in service to their country should not have to wait a lifetime for the benefits they deserve. But that’s a reality of the disability process at the U.S. Department of Veterans Affairs, which hasn’t made payi...
Published: 11/14/17

Editorial: Deputies’ rescue reflects best in law enforcement

The bravery two Hillsborough County sheriff’s deputies showed a week ago is a credit to them and reflects the professionalism of the office.Deputies Benjamin Thompson and Trent Migues responded at dusk Nov. 11 after 82-year-old Leona Evans of Webster...
Updated: 9 hours ago

Another voice: An untrustworthy deal with Russia

President Donald Trump’s latest defense of Russian leader Vladimir Putin included — along with a bow to his denials of meddling in the U.S. election — an appeal to pragmatism. "Having a good relationship with Russia is a good thing, not a bad thing,"...
Published: 11/13/17
Updated: 11/14/17