Florida’s House speaker wants to review Citizens Property Insurance Corp. after the approval of a “unique” deal that gave a relatively new but politically connected company up to $52 million to take out as many as 60,000 policies from the state-backed insurer, via Jim Turner of the News Service of Florida.
Speaker Will Weatherford expressing “serious concerns” about the Citizens board’s 3-2 vote on Wednesday in support of the package for St. Petersburg-based Heritage Property & Casualty Insurance Co., has directed Rep. Doug Holder to have his Regulatory Affairs Committee review the laws governing Citizens.
“Just a few weeks ago, we passed a comprehensive insurance bill with bipartisan support aimed at responsibly reducing the number of Citizens’ policies at no cost,” Weatherford said in a release Friday. “While we want to provide the legislatively created Citizens Insurance Corporation the flexibility to take advantage of ideas and initiatives that will reduce risk to Florida, there is a growing concern about their lack of understanding that Citizens has a greater responsibility to the public.”
Citizens President Barry Gilway was not immediately available for comment.
Gilway has called the deal “unique.” Meanwhile, Citizens Chairman Carlos Lacasa has said the takeout is “an appropriate use of our capital.”
Usually takeouts, approved by the Florida Office of Insurance Regulation, occur in November and December. But because the Heritage takeouts are coming closer to the June 1 start of hurricane season, the financial package was included and Citizens board approval was required.
The money is intended to provide coverage for the private company as it has not been able to build reserves through months of premiums collected on the policies.
Weatherford’s release came on the heels of a more politically directed letter to Gov. Rick Scott from former state Sen. Dan Gelber, a Miami Beach Democrat.
Gelber on Thursday questioned the $110,000 in contributions made by Heritage to the “Let’s Get to Work” political committee, which is backing Scott’s 2014 re-election effort.
“In truth, the whole thing smells,” Gelber wrote. “Floridians will rightfully wonder if Heritage gave you the money because they support you or because they were, literally, trying to get a $52 million gift from an agency over which you have great sway.”
Republican Party of Florida Chairman Lenny Curry responded that Gelber is “shepherding” former governor Charlie Crist through the Democratic Party.
Adam Hollingsworth, Scott’s chief of staff, on Friday called Gelber’s assertion “outrageous,” while also questioning the decision making at Citizens.
“As we have said before, Citizens appears to be tone deaf in earning public confidence,” Hollingsworth said in a release. “Citizens needs to review their own process for taking up risk takeout agreements to ensure that all decisions are fully, publicly vetted with enough time for board members to review the material and make the best decision possible for the taxpayers of Florida who support Citizens.”
Scott has been critical of executive level pay raises at Citizens, which has also come under fire for employee travel spending.
Under the terms of the deal, Heritage is limited in how much it can raise rates on the new policies for three years. It cannot exceed 10 percent annual increases that apply to existing Citizens policies. Heritage must also increase its own assets by $10 million, to $110 million.
The Florida Office of Insurance Regulation issued a consent order for the depopulation deal on May 17.
Heritage also spent between $50,000 and $120,000 since being formed to lobby state lawmakers and the executive branch. The company employed members of the firm Colodny, Fass, Talenfeld, Karlinsky, Abate & Webb for its lobbying, including former state Insurance Commissioner Tom Gallagher.