Winds of change are blowing that could propel Citizens Property Insurance Corp. in a new direction. Area state lawmakers, however, are uncertain exactly what direction Florida's insurer of last resort should take.
"It's no secret that Florida's current property insurance setup is not working," newly elected state Sen. Wilton Simpson, R-New Port Richey, wrote in a email reply to inquiries.
"I agree that Citizens should be the last resort and am working on legislation that will create an environment that improves the situation for Florida's homeowners by allowing more choices," Simpson wrote.
"So many policyholders have no choice aside from Citizens, and it is disheartening to learn the recent news about the organization." Several missteps at Citizens have generated controversy, such as the dismantling of an internal affairs department and lavish expenses.
"Serious reform is greatly needed in order to protect the consumers," Simpson wrote.
Potentially large Citizens rate hikes in 2013 worry state Rep. Mike Fasano, R-New Port Richey.
Fasano has "great concern" that the Legislature could do away with the existing 10 percent cap on annual increases in Citizens premiums.
"Floridians are struggling, and the last thing they need is for their property insurance policies to get higher," Fasano said Thursday. "They have seen their rates increase by double digits over the past few years. Enough is enough."
Local reactions came in the wake of a press release from Associated Industries of Florida.
"Florida has had seven years of luck, but we can no longer substitute wishful thinking for fiscal responsibility and wise governance," Thomas C. Feeney III, president and CEO of the industry trade group, wrote. He applauded proposals last week to reform "underfunded" Citizens and the state's Hurricane Catastrophe Fund.
"While I have great respect for Tom Feeney and for Associated Industries, we must remember they represent and are paid by the property and casualty insurance industry," Fasano said.
"The rate payers and all consumers of Florida, including our small business men and women, would not do well by Mr. Feeney's and Associated Industries' suggestion that rates must go higher," Fasano said.
Last week, Senate Banking Committee Chairman David Simmons, R-Maitland, asked Florida Insurance Commissioner Kevin McCarthy to submit a plan to make Citizens Property smaller. Until now, the Legislature has required Citizens Property to offer rates lower than private insurers.
Citizens Property executives and a number of lawmakers are concerned the insurer has too many policies on its books and couldn't pay all the claims resulting from a major hurricane.
Over the last year or so, five smaller insurers have entered the Florida homeowner insurance market and taken some policies off Citizens Property's hands.
River Crossing resident Allan Schwartz said the previous attempts to steer Citizens policies to private insurers turned out to be a "joke."
"We're going to have empty homes" because of high home insurance premiums, Schwartz believes. He just got another alert from Citizens about a big hike in premiums for the full sinkhole coverage he carries.
Citizens needs "someone tested in management to go in and clean house," Schwartz said. Review of Citizens' management should not fall to Tallahassee insiders, Schwartz stressed.