TALLAHASSEE -- Key House Republicans in the Florida Legislature have raised new questions about a unique $52 million deal between an upstart St. Petersburg insurance company and Citizens Property Insurance Corp.
House Speaker Will Weatherford, R-Wesley Chapel, said he had “serious concerns” about the Citizens deal on Friday, zeroing in on a provision that will allow Heritage Property and Casualty Insurance Company to cherry pick 60,000 insurance polices with no losses, leaving Citizens with a higher concentration of risk. The company also gets up to $52 million from Citizens surplus fund.
“Once again, Citizens did not provide a sufficient advanced briefing to the Legislature, and the proposal was hastily pushed through a sharply divided board.” Weatherford said.
The deal has created a political firestorm ever since the Herald/Times reported this week that Heritage donated $110,000 to Gov. Rick Scott, just two months before Citizens agreed to transfer $52 million to the new company, which opened for business nine months ago.
Scott’s office has said the governor did not influence Citizens board to act on behalf of his political contributor.
Also joining the chorus of critics over the deal was state Rep. Mike Fasano, R-New Port Richey. He penned a letter to state Insurance Commissioner Kevin McCarty on Friday questioning whether Heritage had already violated a May 17 consent order from the Office of Insurance Regulation. Heritage has firmly denied the accusation.
Fasano alleged that Heritage had been contacting insurance agents and policyholders prior to May 23, when the company officially received approval from Citizens and state regulators. That would be a violation of the OIR’s consent order, Fasano said, citing a part of the agreement that bans Heritage from contacting “any potential policyholder, including sending communication regarding this depopulation” prior to the deal being signed.
Heritage firmly denies that it has been contacting policyholders, and said the company contacted agents last week as part of a standard procedure to alert them to an upcoming potential takeout. The company’s chairman, Bruce Lucas, said there was nothing untoward about that.
“We are required to publish a wish list,” of policies, he said. “We contact agents and say, ’In the future we attempt to do a depopulation’.”
The OIR did not respond to a request for comment.
Lucas said the company only began sending letters to homeowners on Friday, after receiving consent from OIR. Homeowners who do not opt out of the takeout within 30 days will be automatically shifted out of Citizens and into Heritage.
As evidence, Fasano presented a letter and email received by Pasco County Supervisor of Elections Brian Corley with regards to a takeout offer from Heritage. A May 17 letter from Corley’s insurance agent informs him that Heritage has “selected” his policy for an “upcoming takeout.” The proposed takeout was approved by Citizens’ board of governors on Wednesday, with only three of eight board members supporting it. Two opposed and three others did not vote, allowing the proposal to carry 3-2.
Corley received an email response from a Heritage employee on May 22, prior to the board’s vote, saying that Heritage “offers a better policy” than Citizens.