The U.S. Senate Budget Committee expresses frustration with Citizens Property Insurance for failing to address concerns about its financial stability, potentially leaving Florida reliant on federal bailout after a major hurricane.
Citizens Property Insurance’s Lack of Financial Stability Response
The U.S. Senate Budget Committee has expressed frustration with Citizens Property Insurance’s failure to address concerns about its financial stability. This lack of response raises concerns about Florida potentially relying on a federal bailout in the aftermath of a major hurricane. Governor Ron DeSantis recently stated that Citizens Property Insurance is ‘not solvent,’ prompting renewed requests from the committee for information and documents regarding the company’s plans to address underwriting losses caused by climate-related extreme weather events and other disasters.
( Credit to: Floridapolitics )
Last year, the committee raised concerns about the potential insolvency of Florida’s insurer of last resort due to climate risks. However, their inquiries have been met with a lack of cooperation from Citizens Property Insurance. The committee has highlighted a non-responsive letter from CEO Tim Cerio, dated December 15, where he referred to a Florida law allowing the company to impose special assessments on all policyholders as a basis for its solvency. Despite this, the question of whether Citizens would require a federal bailout remains unanswered.
Senator Sheldon Whitehouse, the Chair of the U.S. Senate Budget Committee, expressed disappointment with Citizens’ lack of cooperation. He stated that Governor DeSantis’ statements about the company’s solvency and their ability to transfer financial losses to policyholders have not alleviated the committee’s concerns. Whitehouse emphasized that Floridians already face high insurance rates, and the impact of a major storm could significantly worsen the situation. The committee expects full compliance from Citizens with their investigation.
Governor DeSantis’ Concerns and Inconsistent Messaging
Governor Ron DeSantis has previously expressed concerns about Citizens Property Insurance’s financial situation. He warned that the company is undercapitalized and could face insolvency in the event of a major storm. However, his messaging has been inconsistent, as he blamed the Legislature for not implementing insurance reforms without specifying what those reforms were. During a radio interview, DeSantis suggested that homeowners should ‘knock on wood’ and hope that the state doesn’t get hit by a storm.
Citizens’ Obligations as a Public Entity
The U.S. Senate Budget Committee also raised questions about Citizens Property Insurance’s compliance with state law. As a public entity in Florida, Citizens is generally subject to the Florida Sunshine Law, which mandates that all state, county, and municipal records are open for inspection and copying by the public. The committee argues that Citizens’ status as a government entity and its own website’s description of it as a not-for-profit, tax-exempt entity indicate its obligation to provide access to public records.
Conclusion
The U.S. Senate Budget Committee is frustrated with Citizens Property Insurance for failing to address their concerns about the company’s financial stability. They fear that Florida may need to seek a federal bailout after a major hurricane. Governor DeSantis’ comments about Citizens’ solvency and the company’s ability to transfer financial losses to policyholders have not alleviated the committee’s concerns. They expect full cooperation from Citizens in their investigation.
