Citizens Property Insurance Corp. finally has gotten the message about its sweetheart loan plan for private insurers. The state-run insurer has wisely decided to put on hold its foolish proposal to lend $350 million with few strings attached to insurers willing to take some of its policies. All it took was a hard shove in the right direction by state lawmakers.
Citizens announced last week it is pulling the plug on the controversial plan days after defending it before a skeptical House committee. Two legislators correctly labeled the scheme as "corporate welfare.'' One pointed out the foolishness of taking policies out of Citizens and handing them to private insurers who would be weaker and less prepared for a major hurricane.
Allowing private insurers to borrow up to $50 million at low interest rates with few conditions — and a pledge to forgive at least part of the loan if hurricanes struck Florida — never made sense. The idea is for Citizens policyholders to pay premiums that gradually rise so that the state-run insurer becomes healthier, not give away the money to private insurers with little track record.
As usual, Rep. Mike Fasano, R-New Port Richey, was among the first to sound the alarm for consumers when the loan plan was revealed in the fall. But it also took a strong push from House Speaker Will Weatherford, R-Wesley Chapel, and a poor reception at a House committee to get Citizens to see the light. Citizens plans to reconsider the loan proposal next summer, but this is a bad idea that should be permanently shelved.