Crist blasts insurance firm

Criticism just political move, Davis argues

Article Courtesy of The Sun Sentinel

Published  September 20, 2006


TALLAHASSEE Attorney General Charlie Crist's campaign promise to deal with Florida's insurance crisis took shape Tuesday with a surprise attack against Citizens Property Insurance Corp., the state's politically unpopular insurer of last resort.

Crist, the Republican candidate for governor, led the Florida Cabinet in rejecting a routine request by Citizens for approval of its business plan. He also harshly lambasted the company for "poor performance" and said it has "forgotten that it was created to serve the people."

Led by Crist, Gov. Jeb Bush and the Cabinet gave temporary approval to an older Citizens' business plan, with two new requirements: Citizens must hold at least three public hearings before submitting a new plan by Jan. 31, 2007, and it's barred from hiring outside lawyers unless authorized by the Cabinet.

Crist said Citizens has filed four petitions since May seeking to overturn agency orders calling for rate reductions, and in each case, hired a private law firm to sue the state's Office of Insurance Regulation. He also noted that Citizens received a $715 million "bailout" from the Legislature this year and that it receives money from all Florida homeowners through assessments on their insurance bills.

Crist said Citizens' lawsuits against the state are tantamount to "the taxpayers paying to sue themselves," adding, "this is totally unacceptable."

For days now, Crist has been facing more pressure from his Democratic challenger, U.S. Rep. Jim Davis, of Tampa, to make insurance a higher priority. On Tuesday, Davis accused Crist of playing politics with the issue.

"For the last four years, Charlie Crist as a member of the state Cabinet has presided over Florida's property insurance crisis," Davis said. "We need new leadership in Tallahassee that will keep the best interests of Florida's homeowners and business owners at the top of the agenda, whether there's an election coming up or not."

But Crist said his actions weren't politically motivated.

"It's just the right thing to do," he told reporters. "I've got a duty to fight for the people of Florida. And here we have an opportunity where the Cabinet can finally [get involved]. We're not potted plants."

The operations manual that drew Crist's fire was drafted earlier this year by state legislators. It describes broadly how the company is managed, how it sets rates and its ethics policies.

Citizens was created by the state in 2002 as a safety net for homeowners unable to purchase coverage from private insurers. It is now Florida's largest insurer with more than 1.2 million policies, and it's the primary insurer for most residents in South Florida.

Steve Parton, general counsel for the state's Office of Insurance Regulation, said the Cabinet's action wouldn't change how the company operates. Parton, however, called it "hopeful" that Citizens was being required to hold public hearings on how it operates.

Crist wasn't specific Tuesday about his concerns about Citizens' customer service. When asked by reporters, he said, "it's about their actually paying people back when they file complaints. getting blue tarps off their roofs ... It's pretty obvious."

Bush said Crist's concerns about Citizens are valid.

"There needs to be greater transparency and accountability for Citizens," Bush said. "And that's what, I think, [Crist] is trying to do."

Citizens' president, Bob Ricker, was present for part of the Cabinet meeting, but he made no public comments and left as Crist made his remarks.

A spokesman for Citizens later said the company takes Crist's concerns seriously and will make efforts to meet his expectations.

"We're far from perfect and we know it," said Citizens spokesman Rocky Scott.

Scott said consumer complaints about Citizens' performance is down after a high in 2004. During the 2004 storm season, Citizens had 120,000 claims filed and logged 9,831 complaints about its performance. In 2005, it had 165,000 claims and 1,216 customer complaints. Scott said the reduced number of complaints is owed to the company's ability to hire additional staff in 2005.