Florida Senate panel seeks consensus on Citizens Property Insurance, but political divide flares up
Jan 16, 2013
The following article was published in The Florida Current on January 16, 2013:
By Gray Rohrer
Sen. David Simmons, R-Maitland, chairman of the Senate Banking and Insurance Committee, is hoping to build political consensus for comprehensive changes to state-run Citizens Property Insurance Corp. During a meeting of his panel Wednesday, however, Florida’s familiar political divide over property insurance bubbled to the surface.
The committee heard presentations from Insurance Commissioner Kevin McCarty, Citizens CEO Barry Gilway and Chief Financial Officer Jeff Atwater, all of whom urged policies to increase Citizens’ rates at a “moderate” pace to build political consensus.
McCarty, who was directed by Simmons to present proposals based on sound insurance principles without regard to politics, floated the idea of tying Citizens rates to the rates of the top 20 property insurers in the state — thereby eliminating the 10 percent cap on annual rate increases.
A coalition of Democrats and Republican in districts with heavy concentrations of Citizens customers have killed proposals to increase the rate cap, to allow unregulated companies to take over Citizens policies, and to shrink the size of the Florida Hurricane Catastrophe Fund in recent years. Lawmakers in coastal districts bristle at measures that would increase Citizens rates, while legislators from north and central Florida resent potential assessments on all policies to pay Citizens claims if a cataclysmic hurricane hits the state.
That political divide resumed again after Sen. Gwen Margolis, D-Sunny Isles, told Gilway that constituents in her district can’t get insurance now that Citizens has stopped covering houses worth more than $1 million.
“I have a difficult time explaining to my constituents why they have to pay taxes on their automobile rates so that people in Sen. Margolis’ district can have cheap insurance,” retorted Sen. Alan Hays, R-Umatilla.
But Sen. Jeremy Ring, D-Margate, noted that there are middle- and lower-income home owners who are forced into Citizens because the private carriers don’t write in their areas.
“These are people that are in citizens through no fault of their own,” Ring said. “We can’t let these people go to the insurer of last resort at a 200 percent increase.”
View the original article here: http://www.thefloridacurrent.com/article.cfm?id=31128569