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Gov. Rick Scott is pushing for changes to reduce the size of Citizens Property Insurance Corp., the nonprofit government enterprise that provides insurance for Florida property owners unable to obtain coverage elsewhere.
He also wants to make the corporation more accountable.
Citizens insures 4,527 properties in Citrus County valued at $499 million. It is by far Florida’s largest insurance company, covering about 1.34 million properties statewide. The number of policyholders has increased as other insurance companies left the state or became more costly and restrictive in the types of coverage offered.
Citizens is funded by surcharges imposed on property insurance policies written in the state, with provisions for additional assessments if necessary. Rate increases are capped at 10 percent a year, except for sinkhole coverage.
In 2012, a concerted effort to “depopulate” the number of Citizens policyholders was enacted by returning policyholders to the private sector. The depopulation program works with private-sector companies wanting to insure Citizens policyholders.
Last week, the Florida Office of Insurance Regulation announced the approval of up to 100,000 policies to be removed from Citizens Property Insurance by two Florida domestic insurance companies starting Dec. 4. American Integrity Insurance Company of Florida was approved to take out 50,000 policies in November and is approved for an additional 40,000 in December.
Heritage Property & Casualty Insurance Company was licensed in August 2012 and with a home office in St. Petersburg has been approved to remove 60,000 policies.
By law, Citizens policyholders will be notified of the take-out request (policy assumption) and will have 30 days to accept or decline the offer. If policyholders do not respond, they will be “assumed” by the Florida domestic company.
Starting Jan. 8, up to 65,990 more policies are to be removed from Citizens by four Florida domestic insurance companies.
Gov. Rick Scott maintains Citizens inhibits new insurance companies from coming to Florida, resulting in less competition. He said the corporation is underfunded for potential losses, putting all Florida homeowners at risk to pay for losses through taxes.
“Shrinking Citizens will also protect Florida families from hurricane taxes,” Scott said in a speech to the Annual Insurance Summit. “And, shrinking Citizens will attract new capital to Florida and help to permanently reduce the cost of property insurance.”
In response to an October report from the Citizens Audit Committee and allegations Citizens has mishandled corporate funds, Scott called for stronger financial oversight and is expected to appoint an independent inspector general to investigate Citizens finances.
Florida’s Chief Financial Officer Jeff Atwater supports the measure, with a 12-month report period to restore public confidence in the corporation.
Concerns about Citizens Property Insurance have not been a strong local issue. The offices of state Rep. Jimmie T. Smith, R-Inverness, and state Sen. Charlie Dean, R-Inverness, report they have not received many calls about Citizens Property Insurance.
Contact Chronicle reporter Pat Faherty at 352-564-2924 or email@example.com.