Prompted by concerns aired by the state’s insurance consumer watchdog, key lawmakers and business groups on Thursday threw their support behind a $350 million low-interest loan program backers say will reduce the number of policyholders in Citizens Property Insurance Corp, reports the News Service of Florida.
Associated Industries of Florida joined Sen. John Thrasher, R-St. Augustine, and others to tout a proposal by Citizens, the state-backed property insurer, to loan up to $50 million to individual companies willing to take customers out of the state-run pool, which now handles more than 1.4 million policies. Robin Westcott, Florida’s insurance consumer advocate, has raised questions about the program, approved by Citizens board member last month in the hopes of taking out up to 350,000 additional policies from Citizens. , “Citizens must assure consumers and policymakers that a thorough cost-benefit analysis justifies the commitment of up to $350 million of Citizens’ surplus, as this program would allow,” Westcott said earlier this week in a letter to Citizens board of governors.
On Thursday, AIF President and CEO Tom Feeney, said the program is well-conceived and should be put in place as soon as possible. “No other state has amassed so much risk that is going to have to be picked up (by taxpayers),” Feeney said. Critics of the plan have raised a bevy of concerns over the deal itself and the speed to which it is being pursued. “The insurance industry is clearly afraid of having this corporate welfare go through the full legislative process,” said Sean Shaw, a former consumer advocate who works for a Tampa law firm that represents homeowners. “This type of grandstanding and bullying should make everyone take two steps back and question exactly why these companies want to quickly dictate, rather than legislate, this major policy shift.”
The plan calls for Citizens to take money out of its surplus to provide 20-year, low-interest loans to qualified companies that agree to take Citizens policies for at least 10 years. The loan amounts would be based on number of policies and their relative risk.