News Currents

Florida Attorney General Charlie Crist (R), “Citizen’s Property Insurance Corp. needs an overhaul.”

U.S. Rep. Jim Davis (D-Tampa), “Florida taxpayers are being ‘fleeced.'”

Florida CFO Tom Gallagher (R), “no one has been more critical of Citizens than I have.”

Sen. Rod Smith (D-Alachua), “identify reconstruction costs and put those dollars into Citizens now.”

Fla. candidates for governor pledge to solve Citizens Property Insurance Corp.’s problems, encourage new insurers, lower rates

Solving Citizens Property Insurance Corp.’s problems, encouraging new insurers to enter the Florida market and lowering property insurance rates were debated by candidates for governor of Florida during a Jan. 20 forum for candidates held during the Florida Association of Realtors mid-winter business meetings in Orlando.

Attorney General Charlie Crist (R), U.S. Rep. Jim Davis (D-Tampa), Florida CFO Tom Gallagher (R), and Florida Sen. Rod Smith (D-Alachua) fielded questions posed by FAR members about how to solve Florida’s insurance problems.

Davis: Taxpayers fleeced

“I think what has happened with Citizens has been a disgrace and the gentleman sitting next to me (Gallagher) has been on the board that oversees Citizens,” Rep. Davis commented. “I believe they have had some responsibility and it looks like we as taxpayers have been fleeced. Folks are not minding the store in Tallahassee.”

Crist: Citizens needs overhaul

Attorney General Crist said there isn’t any question that Citizens Property Insurance needs to be overhauled. “It is perfectly clear to me, as it is to most Floridians that property insurance rates are too high,” he said, emphasizing more competition, not less.

Crist said he would promote private enterprise and encourage new carriers to come to Florida.

“I think it is very important that we reach out to these insurance companies and say, ‘Look, you have earned an awful lot of money on the backs of these Floridians and that’s got to stop. You have to compete better, compete farther, offer rates that are reasonable and you better start paying these people.’

“I have seen so many blue tarps in this state, it is unbelievable, and those aren’t from hurricanes that happened this year, those are from hurricanes that happened last year,” Crist pointed out. “We have got to do better for our people, we have to fight harder.”

Gallagher defends Citizens

“No one has fought more than I have to make sure people got their claims paid,” Florida CFO Tom Gallagher said. “I held public forums throughout the state where people came and we made the insurance companies be there and many claims were taken care of.”

Gallagher said nobody ever expected to have $32 billion worth of losses in 15 months.

“No one has been more critical of Citizens than I have,” Gallagher said. “I started the task force and made recommendations to the Legislature last year.” Gallagher pointed out that Citizens provides 800,000 people in this state with insurance.

“Without Citizens, where would we be? There would be no mortgages, there would be no real estate closings, there would be nothing else,” the CFO said.

“Does Citizens have problems?” Sure it has problems. When you have a company that was built up instantly to 800,000 policyholders and you have a storm, that’s a problem.”

Gallagher said he has been working to solve those problems and is ready to suggest more comprehensive changes to the Legislature that are going to have to happen to make a difference.

“Without Citizens, 25 percent of the homeowners in this state would not have insurance, would not have a mortgage and would not be able to sell their homes or find loans,” Gallagher said. “Citizens was supposed to be a small company, just to take care of those properties that no one else would write. Who would have ever thought that would become 25 percent of the housing market in Florida?”

Smith: Need interim steps

Sen. Smith said no one can attract out-of-state insurance companies to “suffer those kinds of losses without taking interim steps.”

“This year Florida is going to have over $3 billion new dollars. A substantial portion of that will be from reconstruction caused by the hurricanes,” Smith explained. “We need to identify those dollars from the reconstruction costs, approximately $500 million plus and put that money into Citizens now to defray future assessments.

“That would keep down costs immediately and we would have that interim step,” Smith said. “If we have additional dollars we ought to identify them and beyond those which are used, replenish Florida’s CAT fund.

“Our catastrophic fund has been pulled down. It is important for the computation of insurance companies in terms of what the risk is going to be,” Smith said.

“There is no insurance company in the world, there is no state in this union that can absorb what happened on the Gulf Coast of Florida,” Smith said. “If we do not do that we are going to have rates based on the risk of the longest and highest likely storm.

“Insurance companies will compute risks on what happened on the Gulf coast and those will astronomically raise our rates. If we take these steps I believe we can immediately hold down those rates,” Smith concluded.

Topics Florida Carriers Property A.J. Gallagher