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Good taxpayer deal or 'get-rich quick funding scheme' for $110k Rick Scott donor?

@ToluseO

TALLAHASSEE -- Two months after contributing $110,000 to Gov. Rick Scott’s reelection campaign, an upstart property insurance company is likely to reap a $52 million windfall, paid from the coffers of Citizens Property Insurance Corp.

Sitting on a record cash surplus of $6.4 billion, Citizens is hoping to ink a special deal Wednesday with Heritage Property and Casualty Insurance Company, a St. Petersburg firm that opened for business nine months ago and made significant political contributions.

Heritage has donated more than $140,000 to Scott and the Republican Party of Florida in recent months, and spent tens of thousands more lobbying the Legislature. Now it’s in line to get special treatment from Florida’s state-run insurance firm in the form of an unusual and lucrative “reinsurance quota share” agreement.

If the Citizens board of governors approves on Wednesday, the state-run insurer will pay Heritage up to $52 million to take over 60,000 policies, about $866 a piece.

“It’s an opportunity to get this deal done prior to the next hurricane season,” said Citizens CFO Sharon Binnun, defending the multimillion-dollar payment. “It’s an opportunity for Citizens to get another 50,000 policies off the books before another hurricane season.”

The proposal is the latest effort in Citizens’ controversial and aggressive campaign to reduce risk and revive the private insurance market.

Proponents say the push to shrink Citizens will pay off when the next hurricane hits, saving consumers from having to bail out the state-run insurer. Critics see the campaign cash and lobbying by Heritage as evidence that Citizens and Scott are tapping the insurer’s $6.4 billion surplus for special giveaways to politically-connected companies.

“Citizens’ board continues to fall prey to Tallahassee lobbyists who cook up these get rich funding schemes,” said Rep. Frank Artiles, R-Miami.

More here

Comments

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HolyCrap

Where does my insurance company sign up. I will take the same amount. This is criminal.

Deceived

Hey part of doing business and we have a "businessman" as Governor.

Law&Order

Its not criminal if you make and enforce the laws I guess...This is crazy, how do these people get away with this stuff??????????

jual keripik

there seems to be a magic trick

R. Berthaut

And people say that I'm cynical when I've said that this sort of thing goes on all the time in the marriage of business and politics.

Can' take anymore

The Republican Governor and Legislature have become so brazen in their ripping off the public that it hardly raises an eyebrow these days. Yet, they are always re-elected and never have to worry about outraged editorials or grand jury indictments. As long as Pam Bondi is AG there isn't the slightest chance of any prosecution of Republican politicians, their lobbyist pals or the bigshot campaign donors who own them. And we thought the Democrats were bad when they were in power!

Seth Platt

The only people who should be receiving loans from Citizens Insurance ARE Floridians who are homeowners. These loans could be used to harden homes decreasing risk to the State and Taxpayers in the event of a Hurricane, and also helping to control costs of rising insurance policies that are increasingly becoming a burden to the REAL citizens of Florida.

James

I think the move makes sense for the state. NOAA is predicting an "extremely active hurricane season": estimating 6 hurricanes next season. (http://thelede.blogs.nytimes.com/2013/05/23/noaa-predicts-extremely-active-hurricane-season-2/) The more policies off Citizens' books, the less risk for taxpayers. Being a state run insurance company, means taxpayers are on the hook for any overruns at Citizens.

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