Florida Gov. Rick Scott is sounding off anew against the state’s largest property insurer.
Scott on Wednesday signed a bill that includes modest steps to shrink the size of the state-created Citizens Property Insurance Corp.
The bill (SB 1770) creates a new “clearinghouse” designed to steer homeowners into private insurers instead of obtaining coverage through Citizens. The legislation also phases in over three years a $700,000 cap on the value of homes that can be insured by Citizens.
But Scott used the signing of the bill — which also creates an inspector general for Citizens — to criticize moves made in the last few months by the company. The Republican governor has faulted them for pay hikes given out to top executives and reports about lavish travel spending.
He also said that the insurer should make public any proposed deals seven days before acting on them.
Last week Citizens agreed to pay $52 million to a start-up insurer to accept 60,000 Citizens policies. The deal, which has already come under fire from leaders such as House Speaker Will Weatherford, was voted on less than a week before it became public.
“This is another area where Citizens should come in line with existing state policies and not be given special treatment,” Scott said in a statement.
Citizens President and CEO Barry Gilway said in a statement that he agreed that the corporation “must do a better job communicating with our stakeholders in advance of major initiatives.”
Scott’s criticism came the same day that Gilway and other Citizens executives went before members of the corporation board to discuss ongoing efforts to shrink the size of the company.
Gilway said that Citizens is being successful in ongoing efforts to reduce the size of the insurer, which now has nearly 1.3 million policyholders.
There has been a push since for Citizens to shrink in size because of fears that it would not be able to cover claims in the event of a huge hurricane hitting the state. Citizens has the power to place a surcharge, also called a “hurricane tax,” on its own policies and policies of most insurance policies if it can’t cover its losses.
“At the end of the day, Citizens’ responsibility is to be the insurer of last resort,” Gilway said. “By definition, we should be the company that is retaining the business that other companies are unwilling to (carry.)”
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