Two state lawmakers and three insurance industry representatives voiced their support Thursday for Citizens Property Insurance’s controversial plan to loan out $350 million to the private sector.
The group—which included Sen. John Thrasher, R-Jacksonville, Rep. Bryan Nelson, R-Apopka, and former House speaker Tom Feeney—said Citizens should act “with all due haste” to approve the so-called surplus loan program.
“Citizens, as John pointed out, is a ticking time bomb,” said Feeney, who now leads the business group Associated Industries of Florida and was House speaker when Citizens was created in 2002. Feeney, a major player during the creation of the state-run insurer, now calls it “the worst run casualty and risk market that I am aware of anywhere in the free world.”
Under the new “surplus loan” program, Citizens would take capital from its record $6.2 billion reserves and lend it — under favorable terms — to private insurers who agree to take over policies and keep them for 10 years.
The program could help reduce the size of Citizens by 300,000 policies, which could reduce the amount of assessment Floridians have to pay after a once-in-a-century type hurricane. Gov. Rick Scott has championed the effort to shrink Citizens and reduce its risk, sparking controversial and unpopular coverage changes for policyholders. Business-friendly groups support the $350 million program.
Other lawmakers and consumer advocates have blasted Citizens for rushing the program through in order to avoid a thorough vetting in the Legislature and the public. Last month, the board unveiled and approved the plan over the course of two days, with little public input. The plan is expected to be finalized in the coming weeks.
Nelson defended the program and its rollout, saying he and others began considering the program shortly after the last legislative session ended in March. Nelson called the program an "window of opportunity" to help Citizens "head in the right direction."
When asked why such a worthy program was being advanced outside of the traditional legislative review process, the chair of the subcommittee on Insurance & Banking did not directly answer the question.
“Do we want to wait another hurricane season?” he said. “I think this is an opportunity that we just don’t want to miss.”
Said Sean Shaw, founder of the Policyholders of Florida: "The insurance industry is clearly afraid of having this corporate welfare go through the full legislative process. This type of grandstanding and bullying should make everyone take two steps back and question exactly why these companies want to quickly dictate, rather than legislate, this major policy shift."
Insurance Consumer Advocate Robin Westcott, who warned last month that the program was being advanced “in a hurry,” this week sent a lengthy list of questions to board chairman Carlos Lacasa about the program.
Chief Financial Officer Jeff Atwater said last month that Citizens needed to consider “slowing this thing down” in order to better explain it to the public and make sure it was a good deal.
Rep. Frank Artiles, R-Miami, has asked for several documents in order to probe what he calls an illegal “inside deal,” and said it was “reckless to rush the SPN program through” without a thorough vetting.
Citizens president Barry Gilway said the program has been reviewed by outside counsel, and that the company would address a litany of concerns before the program is approved in a few weeks.
Next week, Citizens board will meet to put the final touches to the program.