Sen. Flores calls Citizens' plan to uncap rates 'simply unacceptable'

In the wake of Citizens Property Insurance's controversial plan to uncap rates on new customers next year, another South Florida lawmaker is tongue-lashing the state-run insurer.

Sen. Anitere Flores, R-Miami, wrote a strongly-worded Letter to the Editor of the Miami Herald, bashing the state-run insurer for attempting to bypass the Legislature's 10-percent cap on rates. She promised to sponsor a law next year clarifying that the 10-percent cap applies to all customers, including new ones.

"If Citizens were to succeed with their plan to increase rates by up to 95%  this will guarantee that the housing market in Miami-Dade will take even longer to recover, if it recovers at all," Flores wrote in a letter that takes Citizens to task for rate hikes over the years."Young couples eager to buy their first homes in a buyer’s market will be unable to make escrow payments due to the high cost of their insurance and property taxes. Not to mention our elderly on fixed incomes, who cannot afford these increases. This is simply unacceptable."

Citizens is currently considering the proposal, and members of its board will discuss the plan further on Thursday.

Earlier today, House Majority Leader Carlos Lopez-Cantera, R-Miami, sent a letter to Citizens interim president Tom Grady, urging him to reject the proposal. Sen. Mike Fasano, R-New Port Richey, has also spoken out against the plan. 

Other lawmakers--both Democrats and Republicans--have been generally silent as Citizens has advanced an ambitious agenda to make sweeping policy decisions that in the past have been reserved for elected officials in the Legislature. Very few lawmakers have come out in support of Citizens' new risk-reduction campaign, which Gov. Rick Scott has encouraged as a way to avoid "hurricane taxes" after a major storm. Even fewer have been critical of Citizens' ambitious plan, which is causing premiums to increase by several hundred dollars for a large chunk of the insurer's 1.4 million policyholders.

 The text of Flores' letter is below:

To the Editor:

 

I was appalled to read the comments made by the spokesperson for Citizens Insurance that the law passed in 2009 capping insurance rates may only apply to existing customers. To put this in context let's go back to why this law was passed in the first place. During the very final minutes of my second year in the Legislature we were presented with a bill that was presented as essential to bringing back private insurers to the state, and that would in turn bring down insurance premiums for our constituents across the state. With only minutes to spare that bill was passed.

However, that bill only served to allow Citizens Insurance to raise its rates indiscriminately and as usual, disproportionately, to our constituents here in South Florida.

At that time, Speaker Rubio called for a special session to address the issue of property insurance. The insurance industry testified that the real driver of cost was re-insurance, and that all the other proposals that were being discussed such as eliminating pup-companies and prohibiting cherry-picking of customers were unnecessary. The state then went into the re-insurance business under the premise that our constituents would benefit. As we all know that did not happen. However, some good things did come out of that legislative session, such as the discounts for mitigation that helped lower premiums for the first time and a 10% cap on yearly premium increases.

Since then, every year, bill after bill has been presented which has allowed for greater increases to premiums and minimized the risk faced by Insurance companies. Forgive me, but I thought insurance companies were in the business of risk, not a guarantee of NO risk. Among those bills was SB 408 that did exactly that, minimize risk with the promise on the Senate floor that this bill would bring in new private companies and help our constituents. I voted against this bill because, as the saying goes: “fool me once shame on you, fool me twice shame on me”. Unfortunately, the majority of my colleagues, including some from our own delegation supported this legislation. Where are our savings? Where are all those new private companies who are writing new business? They are certainly not in Miami-Dade County, where my constituents can’t get insured by anyone other than Citizens.

If Citizens were to succeed with their plan to increase rates by up to 95%  this will guarantee that the housing market in Miami-Dade will take even longer to recover, if it recovers at all. Young couples eager to buy their first homes in a buyer’s market will be unable to make escrow payments due to the high cost of their insurance and property taxes. Not to mention our elderly on fixed incomes, who cannot afford these increases. This is simply unacceptable.

To clarify whether or not the legislature intended to cover only existing policies, my first bill presented this next legislative session, will be to make it VERY CLEAR that we meant all business, NEW AND OLD. In the meantime I urge the board of Citizens to reject this proposal which is nothing short of immoral. 

Anitere Flores
State senator

 

 

Earlier today, House Majority Leader Carlos Lopez-Cantera, R-Miami, sent a letter to Citizens interim president Tom Grady, urging him to reject the proposal. Sen. Mike Fasano, R-New Port Richey, has also spoken out against the plan. 

Other lawmakers--both Democrats and Republicans--have been generally silent as Citizens has advanced an ambitious agenda to make sweeping policy decisions that in the past have been reserved for elected officials in the Legislature. Very few lawmakers have come out in support of Citizens' new risk-reduction campaign, which Gov. Rick Scott has encouraged as a way to avoid "hurricane taxes" after a major storm. Even fewer have been critical of Citizens' ambitious plan, which is causing premiums to increase by several hundred dollars for a large chunk of the insurer's 1.4 million policyholders.

 The text of Flores' letter is below:

To the Editor:

 

I was appalled to read the comments made by the spokesperson for Citizens Insurance that the law passed in 2009 capping insurance rates may only apply to existing customers. To put this in context let's go back to why this law was passed in the first place. During the very final minutes of my second year in the Legislature we were presented with a bill that was presented as essential to bringing back private insurers to the state, and that would in turn bring down insurance premiums for our constituents across the state. With only minutes to spare that bill was passed.

However, that bill only served to allow Citizens Insurance to raise its rates indiscriminately and as usual, disproportionately, to our constituents here in South Florida.

At that time, Speaker Rubio called for a special session to address the issue of property insurance. The insurance industry testified that the real driver of cost was re-insurance, and that all the other proposals that were being discussed such as eliminating pup-companies and prohibiting cherry-picking of customers were unnecessary. The state then went into the re-insurance business under the premise that our constituents would benefit. As we all know that did not happen. However, some good things did come out of that legislative session, such as the discounts for mitigation that helped lower premiums for the first time and a 10% cap on yearly premium increases.

Since then, every year, bill after bill has been presented which has allowed for greater increases to premiums and minimized the risk faced by Insurance companies. Forgive me, but I thought insurance companies were in the business of risk, not a guarantee of NO risk. Among those bills was SB 408 that did exactly that, minimize risk with the promise on the Senate floor that this bill would bring in new private companies and help our constituents. I voted against this bill because, as the saying goes: “fool me once shame on you, fool me twice shame on me”. Unfortunately, the majority of my colleagues, including some from our own delegation supported this legislation. Where are our savings? Where are all those new private companies who are writing new business? They are certainly not in Miami-Dade County, where my constituents can’t get insured by anyone other than Citizens.

If Citizens were to succeed with their plan to increase rates by up to 95%  this will guarantee that the housing market in Miami-Dade will take even longer to recover, if it recovers at all. Young couples eager to buy their first homes in a buyer’s market will be unable to make escrow payments due to the high cost of their insurance and property taxes. Not to mention our elderly on fixed incomes, who cannot afford these increases. This is simply unacceptable.

To clarify whether or not the legislature intended to cover only existing policies, my first bill presented this next legislative session, will be to make it VERY CLEAR that we meant all business, NEW AND OLD. In the meantime I urge the board of Citizens to reject this proposal which is nothing short of immoral. 

Anitere Flores
State senator