Artiles contended that the program’s eligibility rules were written in ways that exclude all but a few privileged insurers, which are represented by Florida lobbyists.
Sen. Mike Fasano, R-New Port Richey, said the concept of taking money collected from policyholders and lending it to private companies was “outrageous.” He also argued that Citizens may end up giving money to private companies that eventually go bankrupt without paying back the loan.
Program documents from Citizens acknowledge that the company may not have the power to enforce its contract with a private company that becomes “financially impaired.”
That’s exactly what Citizens policyholder Allan Schwartz fears.
“The last time that Florida got involved with takeout companies, it was a disaster,” said Schwartz, of New Port Richey. “Most of them, within a year and a half, pulled out of the state.”
Artiles is one of several lawmakers who believe the Citizens’ board has erred in advancing major new policies swiftly without consulting the Legislature or waiting for public input.
The committee unveiled the new proposal on Thursday with plans for final approval on Friday. No public input was accepted at the meeting, and Citizens’ lawyer spent considerable time defending whether the plan complied with current law.
Proponents of the program say it is an inexpensive way to take much of the risk off of Citizens books, a high priority of Scott. Other risk-reduction options were much more expensive, said Gilway.
If a once-in-a-lifetime type hurricane hits Florida, Citizens may have to levy fees on all insurance policies to cover a shortfall.
By lending money to private insurers, rather than buying expensive backup insurance, Citizens could save money on its risk reduction campaign, Gilway said. The chance that consumers might be hit with a post-hurricane fee may be reduced. The amount of the post-hurricane fee could be decreased by as much as 30 percent after a monstrous storm.
“If the wind blows next year, and we don’t make this decision, there will be $1.17 billion more in assessments on the backs of Floridians,” said Gilway.