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South Florida lawmakers vow to overturn Citizens’ uncapped rate plan next year

Two South Florida lawmakers have put up a preliminary roadblock to a plan by Citizens Insurance to remove the 10-percent cap on rates for new policyholders.

Sen. Anitere Flores, R-Miami and Rep. Jose Felix Diaz, R-Miami, have both said they would file legislation next year to overturn the plan if Citizens’ board opts to approve it.

In a Sunday op-ed in the Miami Herald, Flores called the plan “nothing short of immoral,” claiming that it would hurt homeowners.

The plan, which is still being ironed out and debated, could cause the cost of joining Citizens Insurance to increase significantly in some parts of the state. Currently there is a 10-percent cap on rate increases, but Citizens believes that cap only applies to existing customers. Citizens says the plan is one of several options being considered to help the insurer prepare financially for a major storm, which could lead to "hurricane taxes" if the insurer runs out of money.

Diaz released a  statement last week stating that his first order of business next year would be to file legislation clarifying that the 10-percent cap applies to all customers, not just existing ones. (He is set to face another incumbent, Rep. Ana Rivas Logan, R-Miami, in a tough primary race.)

“If there exists, even a little bit of, doubt, regarding the intent of our statutes, we must act as a legislative body to ensure that all Citizens property insurance holders are protected,” he said in a statement. “That is why the first bill I will file next year will be a clarifying amendment, that will re-confirm that all Citizens Property Insurance policies will be subject to our previously enacted statutory cap.”

Rep. Carlos Lopez-Cantera, R-Miami, wrote a letter to Citizens’ interim president Tom Grady last week, urging him to reject the uncapped rate plan. Lopez-Cantera, House Majority Leader, is term limited and would not be able to file repeal legislation next year. Sen. Mike Fasano, R-New Port Richey, has also been critical of Citizens' plan (Fasano is term-limited in the Senate, but is planning to run for a House seat).

Citizens Board Chairman Carlos Lacasa, a Miami-Dade resident, urged the board last week to more actively engage the Legislature in policy decisions in order to avoid a showdown with lawmakers. Despite cries from fiscal hawks, lawmakers opted against passing major property insurance reform this year, and Gov. Rick Scott urged Citizens board to operate more independently.

“They will pass legislation that undoes what we do or prevents us from moving in that direction in the future," Lacasa said. "And then we have yet that much more of our hands tied behind our back. This has to be a very deliberative process."

Citizens board will meet in the coming weeks to decide on the plan.