State Representative John Tobia: Return Citizens Property Insurance to original intent
May 29, 2012
The following article was published by the Miami Herald on May 29, 2012:
By John Tobia
Re state Sen. Anitere Flores’ May 20 Other Views column, Where are our savings?: In 2002, Citizens Property Insurance Corporation was created as an insurer of last resort.
That seems to be a paradoxical statement considering there are over 1.45 million Citizens homeowners policies in force. Are there no other insurance companies able to provide these policies? Of course there are, just not at blue-light special prices.
By allowing Citizens to provide low rates, we are pricing out the private market and deterring more private capital from investing in Florida. Worst of all, Citizens has over $504 billion in exposure and only has the capacity of $12.9 billion to pay its claims. We have allowed Citizens to set rates that are not actuarially sound and continue to do nothing to fix this. Not very Republican or fiscally responsible of us.
You may be asking, How did the Legislature allow this to happen? The answer is simple.
We have allowed Citizens to form into a socialist program that could have a crippling effect on Florida’s economy and has destabilized the insurance market. It is reprehensible that some of my peers in the Legislature wave the Republican flag when it is convenient and electorally sound, but when the time comes to be a leader and put the state of Florida first, they buckle.
I implore Citizens’ new president, Tom Grady, and Chairman Carlos LaCasa not just to propose the removal of the 10-percent cap on new policies, but to take the next step and demand the removal of the cap altogether for all policies.
Citizens must be returned to its original intent as an insurer of last resort and we need to allow Citizens to set rates determined by the private market. To do anything else would be immoral, irresponsible and socialistic.