Newspaper: Gov. Scott Considering Closing Citizens Insurance
TALLAHASSEE (CBS4) – Florida's insurance carrier of last resort may be on its last legs if Gov. Rick Scott has his way, according to a published report.
The Sarasota Herald-Tribune is reporting that Gov. Scott has been looking at the possibility of closing Citizens Property Insurance, the state-backed property insurance company.
According to the story even lobbyists for the private property insurance industry, which wants to limit the scope of Citizens Property, were alarmed by the move to eliminate it altogether. The lobbyists, the report states, claim Florida carriers couldn't handle the 1.3 million property owners insured by Citizens, which is Florida's largest property insurer for businesses and home owners.
The newspaper reports Scott told top insurance industry lobbyists back in February that he wanted to end Citizens before his first term in office ended.
The paper based its story on documents and emails tracing Scott's involvement in the issue. Scott has never talked publicly about abolishing the state-backed insurer.
But his press secretary released a statement Monday afternoon responding to the story writing, "Governor Scott is committed to making Citizens the insurer of last resort. With the position we're in now, Florida taxpayers would be on the hook for a major storm or hurricane. That's not acceptable. The Legislature is still considering ways to fix this issue, but the governor has always been clear; he wants a vibrant, competitive private insurance market."
But for many South Florida families, like the Arrieta's, finding affordable private insurance is nearly impossible.
Jorge Arrieta and his family were insured with State Farm for thirty years until the company dropped them because their home is old.
"The middle of last year they told us, oh that's it so we had to look for something else," Arrieta told CBS4's Natalia Zea.
Arrieta signed up with Citizens Insurance.
"We were trying everywhere, but it was way too expensive for the price. We had no choice," said Arrieta.
"The tri-county area is what I like to call the black hole because homeowners insurance carriers don't like to write insurance down here," said Christian Monnar, president elect of the Latin American Association of Insurance Agencies.
He says without Citizens families like the Arrietas could have to go without, or a private insurer could end up tripling their rates.
"We need Citizens, but I try to go every other route, and there are those circumstances that they don't qualify anywhere," Monnar told Zea.
But Monnar believes Citizens should limit who can sign up, to encourage private competition- he says some homeowners covered by citizens, should instead go with a private insurer.
"I think Citizens is being abused right now as an insurance company," said Monnar.
A Tallahassee-based think tank, the James Madison Institute, called on lawmakers in February to reduce Citizen's overall stake by 60 percent over the next four years to help stabilize the state's property insurance system.
Many rank and file Republicans, also caught off guard by the report, simply want to trim Citizens' fat, reduce its market share, and reduce Citizens coverage back down to bare-bones level that wouldn't compete with their policies.
(©2011 CBS Local Media, a division of CBS Radio Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
