Citizens Task Force Preliminary Data Estimates a $527 Million Deficit

March 24, 2005

Preliminary data released by Citizen's Property Insurance Corp., Florida's insurer of last resort, indicates the company racked up a $527 million deficit in its windstorm account in 2004.

Citizens officials said a comprehensive audit won't be released until mid-April. The estimate, presented to the Citizens Property Task Force in Tallahassee was significantly higher than the previous estimate of $373.1 million.

Tom Gallagher, the state's chief financial officer, has raised one possible avenue for covering the deficit without assessing every homeowners policyholder in Florida: tap into an estimated $752 million in sales tax revenues generated by hurricane recovery efforts.

Late last month, Gallagher sent letters to Gov. Jeb Bush, Speaker of the House Allen Bense and Senate President Tom Lee, urging them to support his bid to dip into this extra revenue to make up the Citizens shortfall.

Citizens will be paying an estimated total $2.3 billion to cover claims losses from the four hurricanes and the one tropical storm that hit Florida last year.

Although Citizens buys reinsurance from the Florida Hurricane Catastrophe Fund, like other insurers, none of the losses from individual storms exceeded its deductibles. So, Citizens was required to pay out all its claims from its surplus.

Task force members urged Citizens to wrap up the audit as quickly as possible so a formal request about using the tax money could be presented to the Legislature.