Florida’s Gov. Rick Scott has come close to issuing an ultimatum to the board of governors of Citizens Property Insurance Corp. The governor challenged the board on Tuesday to come up with ways the insurance company can better meet its obligations in the event of a big storm. Lawmakers around the state agree with Scott that Citizens would fail altogether if a hurricane or series of hurricanes were to hit.
Citizens, of course, is the insurer of last resort for property owners in the state. As private insurers have left the state or cut back on hurricane and windstorm coverage, Citizens has grown. The company now insures almost 1.5 million policyholders and employs more than 900 workers.
The company’s board has about a month to put together proposals. The governor said he expects to hear any and all suggestions at his Dec. 6 Cabinet meeting. He also encouraged the board to consider steps the insurer can take that don’t involve the Legislature. While the Legislature is apparently open to additional reforms, the process may take longer than the company can afford.
Scott has long favored a private takeover of Citizens, and he hasn’t been alone. Even the chair of Citizens’ board floated the idea this past summer. The business, they believe, would be a good investment, if only because it has a sizeable book of business.
At the meeting this week, Scott rebuked Citizens’ president for the company’s business plan. Seemingly disturbed by the lack of movement toward financial stability, the governor snapped, “You would never organize your personal life like this.” He added that the Legislature understands all too well that Citizens cannot continue to operate this way.
The governor added, too, that he doesn’t believe most Floridians understand what the consequences would be if Citizens weren’t able to meet claims obligations. He said he didn’t believe they understood that every property and auto insurance policy would be hit with an assessment to cover Citizens’ payouts.
Lawmakers, the governor included, have been growing less patient and more anxious with Citizens financial situation with every hurricane season. The absence of a major storm for the past few years has them on edge, waiting for the other shoe to drop.
Source: Miami Herald, “Scott wants answers from Citizens on downsizing,” Brent Kallestad, Nov. 1, 2011Share