The governing board of Florida’s Citizens Property Insurance Corp. has agreed on a new legislative agenda that could save the state-run insurance program more than $1.5 billion in insured losses. The board met with state legislators this week in Orlando to discuss the agenda, particularly what legislators can do to make the insurance program more efficient. The board expressed the importance of making cuts to the types of properties the program can insure and has begun pressuring lawmakers to hasten the rate at which premiums can rise.
Earlier this year, Florida lawmakers approved a 400% rate proposal from Citizens, but staggered the rate at which the new rates would be enacted. Since that time, legislators have been working toward reducing the number of policies represented by the insurance program, which currently numbers 1.5 million. The board of governors wants to see that number drop to 800,000 and claims that this number will allow the program to remain financially solvent in the future.
Governor Rick Scott has been a proponent for depopulating the program, but Citizens is one of the most affordable places to find insurance coverage in the state, which is the reason it attracted so many clients in the first place. Because of comparatively low rates, the program has developed some financial issues. The program is now on the verge of exhausting its surplus capital and reinsurance reserves. If the program were to expire, all of the policies provided through the program would be invalid. Legislators are currently working toward a solution, but may not opt to follow the agenda suggested by the Citizens board of governors.
