Florida legislators consider allowing surplus insurers to participate in Citizens Property Insurance Corp

Citizens Insurance FloridaIn an effort to make Florida’s Citizens Property Insurance Corp. more sustainable in the future, lawmakers are now considering opening up the state-run insurance program to surplus carriers. Legislators believe that by allowing surplus insurers to participate, the program will go through a depopulation period as consumers take advantage of the wider variety in policies they have access to. Currently, the state-run program covers more than 1.5 million policyholders. With the program being so large, Governor Rick Scott believes that the only two solutions for sustainability lie in depopulating or privatizing the program.

Florida lawmakers have been torn on what to do with the ailing system for several years. In 2008, private insurers were allowed to take over some 400,000 policies, which allowed the program to regain some financial stability. Last year, Citizens proposed to raise rates on sinkhole coverage throughout the state by an average of at least 400%. Legislators approved the proposal and allowed the program to enact the new rates over a set period of time. These moves, however, were not enough to save the program from its lingering financial problems.

If the state’s fails to depopulate the program, privatization may be the only option. Opponents to the measure claim that the lack of regulation in the state makes the plan impossible. Any action will require new laws passed through the state’s Legislature, which is currently on recess until the beginning of the next legislative session in early 2012.

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