Crist pushes for Citizens Property to compete against private insurance firms

Article Courtesy of The Sun Sentinel

By Jason Garcia
Published  April 3, 2007

TALLAHASSEE Gov. Charlie Crist has quietly renewed his push to put state-run Citizens Property Insurance Corp. into direct competition with the private insurance industry.

Crist recently called key lawmakers in both the House and Senate, lobbying them to hold hearings on legislation that would allow any homeowner in Florida to choose Citizens as his or her insurance company, even if a private insurer also offers coverage.

Crist views a competitive Citizens, which has historically been restricted to people who can't find coverage on the private market, as a way to force the State Farms, Allstates and Nationwides of the world to drop their rates at the risk of losing business. But the idea is vehemently opposed by the insurance industry, which argues that government-supported Citizens would be able to undercut the private insurers and ultimately drive them out of Florida entirely.

The same issue pitted Crist against House Speaker Marco Rubio on the final day of the Legislature's emergency session on insurance in January, briefly threatening to derail the entire insurance package.

Under that package, consumers who are offered coverage by a private insurance company can only select Citizens if the private insurer's premium offer is at least 25 percent higher. The only exception, which was added on the final morning of the weeklong special session, is for people already insured by Citizens, who can remain with the state company no matter what private offers they receive.

Sen. Bill Posey, chairman of the Senate Banking and Insurance Committee, and Rep. Ron Reagan, chairman of the House Jobs & Entrepreneurship Council, each said Crist called them recently to ask that they schedule hearings on each chamber's respective bill that would erase the 25 percent threshold. The bills, which would also prohibit private insurance companies from establishing Florida-only subsidiaries, have yet to receive a single hearing halfway through the 60-day legislative session.

Both legislators said Monday they intend to give the bills hearings. But they also expressed some skepticism about the proposal.

"We don't want Citizens to be the only insurance company in Florida," said Posey, R-Rockledge, though he also added, "I like the idea."

Reagan said Citizens "should be a carrier of last resort -- not a carrier of first resort."

"I would think that if there's a company out there that's close [with a coverage offer], we should encourage people to go there and not the insurer of last resort," said Reagan, R-Bradenton.

Crist said he simply wants the legislation to be given a chance.

"They may or may not pass, but at least let's give them the light of day," Crist said.