Citizens Property Insurance Sees Big News in a Small Drop
Jan 20, 2012
The following article was published in The Sunshine News on January 20, 2012:
Citizens Insurance Sees Big News in Small Drop
By Jim Turner
For reform of Citizens Property Insurance Corp. reform, even tiny steps can be a big deal.
Between Jan. 1, 2011, and this week, the state-backed Citizens Property Insurance Corp. is down 18 policies.
With more than 1.47 million polices now being handled by the “insurer of last resort,” 18 might not sound like a lot. However, for state officials who have been trying to direct a vast number of those policies toward private insurers, the reduction — no matter how slight — is viewed as good news.
Scott Wallace, the departing president of Citizens, told members of Florida’s Cabinet this week the reduction “is a far cry better than growing by 1,000 policies a day.”
Wallace, who is leaving Citizens in April after six years, said the company is in “best shape ever” financially and in terms of management.
The goal for Citizens is to shave 7 percent of its risk, including $1 billion in coverage from properties that overlook the Atlantic Ocean and Gulf of Mexico, reducing the number of overall policies from 1.5 million to 800,000.
With storms and other coverage, such as sinkholes, Citizens’ customers have the state — primarily its taxpayers, regardless of whether they are Citizens’ customers — facing exposure of up to $500 billion in potential claims.
Wallace credited the reduction in part to an effort announced in December that:
— Set a $1 million coverage liability limit for coastal accounts, down from $2 million.
— Imposed a mandatory 10 percent sinkhole deductible.
— Reduced personal liability coverage from $300,000 to $100,000.
Meanwhile, the Citizens board of governors is also supporting a number of bills now before the state Legislature:
SB 1784 by Sen. Alan Hays, R-Umatilla, would discontinue policy discounts, prohibit Citizens from accepting applications from nonresidential commercial risks, and allow Citizens to set residential rates deemed more appropriate by the corporation. The bill would allow policies not to include screen enclosures or any structure detached from the house.
SB 1346 by Sen. Steve Oelrich, R-Gainesville, reduces from 6 percent to 2 percent the amount of the projected deficit in the coastal accounts.
SB 578 by Sen. Garrett Richter, R-Naples, allows Citizens to release some information from underwriting files and confidential files to companies that are considering writing or underwriting risks.
Gov. Rick Scott told reporters after Wednesday’s Cabinet meeting the 18-policy reduction shows “we’re making progress in Citizens.”
“We’re starting to depopulate, it’s not growing, so I think that’s all good,” he added. “It would be nice to have everything happen in a day, but it doesn’t seem to work that way.”
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