热点黑料

A plan by Florida’s state-backed property insurer to loan private insurers millions of dollars in surplus in exchange for removing policies has not been properly vetted and is a sweetheart deal for a few insurers, a Florida official has charged.

Citizens Property 热点黑料 Corp. voted earlier this month to loan up to $350 million of its $6 billion in surplus to private insurers with the goal of moving up to 300,000 policies to the private market.

Citizens Depopulation Committee Chair Chris Gardner said the plan could represent a major jumpstart in the insurer’s depopulation rate that has hovered around 100,000 annually. “I believe the way this program is conceived, it could lead to a renaissance of the Florida market,” said Gardner.

However, state Rep. Frank Artiles, R-Miami-Dade, is charging that the plan is being rushed into without adequate oversight and a full understanding of its implications.

In a letter to 热点黑料 Commissioner Kevin McCarty, Artiles took Citizens to task for not releasing the full details of its surplus note program until just days before the Citizens board gave its seal of approval. He also questioned whether Citizens even has the statutory authority to implement the plan.

“The legislature never delegated an unfettered right to Citizens to use its surplus in any manner it chooses to adopt,” wrote Artiles.

Artiles has also launched a one-man investigation into the role the Tower Hill Group and American Integrity 热点黑料 Co. had in developing the plan.

Under the program, qualified insurers could receive up to $50 million in the form of a 20-year surplus note. For the first year years, insurers only have to pay the interest on the notes based on the U.S. Treasury 10-year bond rate, which is currently around 1.8 percent.

American Integrity has indicated it would consider removing 50,000 policies from Citizens and the Tower Hill Group through its subsidiaries another 130,000. Between the entities, they could receive $200 million of the $350 million program, an amount that Artiles says “represents an alarming concentration of risk.”

Artiles is asking Citizens and state regulators to hand over all correspondence, financial reports, and other information involving Tower Hill and American Integrity.

“At a time when Citizens is raising rates, reducing coverage, and telling Florida residents to pay more for less, Citizens has selected to deliver a $350 million gift to a few insurance companies,” wrote Artiles.

Citizens President Barry Gilway has said that the surplus note program has various financial safeguards including that insurers would have to retain policies for at least 10 years and the minimum total insured value an insurer must take to qualify for the program is at least $5.5 billion.

The participating insurers must also be actively writing property insurance and have a risk based capital ratio of 300 percent and minimum surplus of $25 million. They must also have in Florida direct written premiums of at least $50 million and enough reinsurance to cover a one-in-100 year and two one-in-10-year probable maximum losses.

“We shouldn’t be depopulating if we are not moving this business to financial insecure companies,” Gilway has said.

Chief Financial Officer Jeff Atwater has urged Citizens to be thorough and to exercise due diligence before it hands over any money to a private insurer. “I’m glad they’re pausing and they’re going to come back and show this is mathematically the right thing to do and there is a marketplace interest in taking these accounts,” Atwater told reporters following a Cabinet meeting last week.

While some state officials are looking to put the brakes on the surplus note depopulation programs, some of Florida’s largest pro-business groups have been expressing their support. Associated Industries of Florida, Florida Tax Watch and Americans for Prosperity-Florida have all issued statements supporting Citizens and its efforts to reduce the potential assessment burden on all state policyholders.

“Our organization fully supports the depopulation of Citizens,” said Abigail MacIver, Prosperity-Florida’s director of policy, in a statement. “The focus needs to continue to be on ways we can help reinvigorate the private market, which is willing and able to take on insurance risks without burdening Florida taxpayers.”

Topics Florida Carriers Excess Surplus