Fla. largest insurer wants sweeping changes
TALLAHASSEE, Fla. (AP) — Florida’s largest property insurer wants sweeping changes — including the ability to charge higher rates — in the coming year.
It may be a hard sell during a contentious election year, but the board that governs Citizens Property Insurance voted on Monday to ask state legislators to approve a long list of changes during the upcoming session that starts in January.
Those in charge of the state-created insurer are pushing ahead with the changes at the urging of Gov. Rick Scott. Scott recently sounded warnings about Citizens, which has nearly 1.5 million policyholders, including many homeowners along the coast.
Scott and other top GOP legislators would like to see Citizens to shrink in size because of fears that the insurer could be subject to massive losses if a big hurricane hits. Unlike private companies, Citizens has the power to place a surcharge on nearly every insurance bill in the state if it can’t cover its losses.
“I’m the first to acknowledge that it is time for us to contract and there is political pressure for us to contract,” said Carlos Lacasa, chairman of the Citizens board and a former state legislator from Miami.
Lacasa and other members of the Citizens board said they want lawmakers to reconsider a controversial bill from this past year that would allow Citizens to raise its rates more than 10 percent a year and would make it harder for policyholders to be covered by Citizens.
For example, state law now says that a homeowner is eligible for a policy from Citizens if the only alternative is a policy from a private company charging rates that are 15 percent higher. The new proposal would make homeowners ineligible for Citizens unless a private company is charging rates 25 percent higher.
Citizens officials also began discussing changes that could be done without approval from the Florida Legislature, including increasing deductibles for sinkhole coverage and eliminating certain types of coverage.
One proposal that was discussed would require homeowners to pay 10 percent of the cost of any sinkhole damage before the insurance coverage kicks in.
Such changes could get a rough reception in the Florida Capitol.
Some GOP legislators have already signaled that they are not anxious to consider any major property insurance changes during 2012. The Florida Legislature approved a comprehensive property insurance bill earlier this year only to see it trigger protests when Citizens tried to enact large rate hikes for sinkhole coverage.
Sen. Mike Fasano, R-New Port Richey, said proposed changes to Citizens would not shrink the size of the insurer because private companies don’t want to cover people in places such as the Tampa Bay area where the majority of sinkhole claims have been.
He called private insurers “hypocrites” who won’t start offering coverage to homeowners regardless of what the state does.
“People in the Tampa Bay area would love to have a choice, they don’t have one,” Fasano said. “Our governor and a few others in Tallahassee don’t get it.”
Some members of the Citizens board expressed a similar fear on Monday. But John Rollins, a board member and an insurance actuary contended that new statewide data shows that many carriers are adding policies, just not in the Tampa Bay area or in South Florida.
Copyright 2011 The Associated Press.