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Citizens board OKs ways to shrink
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Article Courtesy of The Sun Sentinel
By Julie
Patel
Published November 17, 2011
Citizens Property Insurance's board gave an early green light late Monday to recommendations to help the state-backed insurer downsize its size and financial risk to Floridians.
Many of the proposals would allow it to shrink and effectively raise rates without changing any laws. Some require legislation but it's unlikely lawmakers will approve a property insurance bill during the legislative session that starts in January.
Citizens' employees will draft recommendations, which will be vetted by a panel before the board takes a final vote within the next few weeks.
Gov. Rick Scott recently ordered Citizens to come up with a plan to shrink by Dec. 6 and he wants it implemented by June. All automobile and property insurance policyholders in the state would be charged fees if a major hurricane triggers deficits for Citizens.
The early recommendations include:
Repealing a law that caps Citizens' rate hikes to 10 percent a year. Some board members said this provision may be too controversial for legislators, especially in an election year, but they're willing too consider it for now.
Doing more inspections to effectively increase premiums by more than the 10 percent allowed each year under state law. The inspections allow Citizen officials to revoke hurricane-proofing discounts they say aren't deserved and increase the rebuilding value of homes.
Requiring letters from private insurers declining coverage before someone can get coverage from Citizens.
Allowing national insurers to create "pups," or subsidiaries, in Florida. A state law in 2007 barred new pups from being formed.
Repealing a law allowing people to get coverage from Citizens if a private insurer offers coverage but charges at least 15 percent more.
Some of the recommendations come from SB 1714, which was proposed earlier this year.
Board Chairman Carlos Lacasa said Citizens is in a "paradoxical position" because it wants to reduce risk for non-policyholders but it's sensitive to the economic downturn: "If you can't afford insurance, you can't stay in a home and you can't buy a home."
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