Citizens Insurance still faces storm clouds

Headline Goes Here

TALLAHASSEE, Fla. - Among dozens of bills Gov. Rick Scott passed this week was a bill on changes at Citizens Property Insurance Corp., which is drawing scrutiny for a deal it reached with a politically-connected property insurance company.

The bill signed Wednesday (SB 1770) includes a series of steps aimed at reducing the number of homeowners getting coverage from Citizens, such as setting up what is described as a "clearinghouse" where private insurers could intercept policies that otherwise would wind up with Citizens.

The bill would also require Scott and the Cabinet to appoint an inspector general for the beleaguered, state-backed insurer.

?This legislation will bring much needed reforms to better protect the taxpayers who support Citizens Property Insurance,'' Scott said in a prepared statement.

Meanwhile, Citizens tried to manage the fallout of a controversial deal approved last week that could funnel up to $52 million to St. Petersburg-based Heritage Property and Casualty Insurance, which would take out as many as 60,000 from Citizens. "Depopulation" has become the buzzword when it comes to how to fix Citizens, but this form of depopulation has raised concerns, including from House Speaker Will Weatherford.

Even Scott said Citizens should give at least seven days notice of such issues.

Citizens President and Chief Executive Officer Barry Gilway agreed with Scott that the state-backed insurer needs to do a better job of communicating about major initiatives, though he said staff members in the past have struggled with how early to present information about potential deals.

At the same time, officials said this week that they have confidence in the fiscal strength of Citizens and the state-backed Florida Hurricane Catastrophe Fund, essentially a pool that provides insurance for insurance companies.

"I don't think anybody is claiming perfection at this point, but for the first time in a few years anyway the bonding capacity appears to be adequate to cover the claims in the fund," said Dennis MacKee, spokesman for the State Board of Administration, which oversees the catastrophe fund.

Copyright 2013 by The News Service of Florida. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.