Rocked by a series of
corporate scandals — and with its CEO facing a tough confirmation hearing —
Citizens Property Insurance Corp. has gone increasingly positive with its
messaging in recent weeks. The company says it has done a superb job of
reducing risk over the last year, and the chance of “hurricane taxes” has
plummeted by 43 percent.
That message clashes
squarely with the apocalyptic warnings echoing through the Florida Legislature,
where lawmakers are using “tough medicine” themes to push a bill that would
cause insurance rates to skyrocket.
the doomsday rhetoric of the insurance lobby, say Florida is one hurricane away from financial
destruction, and shrinking Citizens by raising rates is the fiscally prudent
thing to do.
Citizens made similar
arguments last year, but of late the company has backpedaled from much of its
austerity message and measures. Policy changes last year, while unpopular, have
helped Citizens to shrink rapidly, removing much of the threat that Floridians
will have to bail the company out after a storm.
By the time hurricane
season rolls around, Citizens “will have reduced assessment potential for
Floridians by $3 billion, or 43 percent,” CEO Barry Gilway told lawmakers this week during a confirmation hearing
to keep his job. “Now, I want to repeat those numbers, because it’s huge.”
It’s a much different
message from the one coming from reform-minded lawmakers in Tallahassee.
“If the hurricane
doesn’t even go through your area, your constituents will be assessed upwards
of between $2,000 and $5,000 per year,” Sen. David Simmons, R-Altamonte Springs, told lawmakers Wednesday.
In presenting his
bill, Simmons used figures from 2012, before Citizens reduced exposure
drastically. Citizens clarified that the numbers used by Simmons were inflated.
warnings about billion-dollar “hurricane taxes” are nothing new in Florida, part of the
showmanship required to pass property insurance bills in the Legislature.
Each year, lawmakers
and the business lobby pitch rate increases at Citizens, warning of the “Big
One” and the financial wreckage it would cause. But because Florida has dodged hurricanes for seven
years, Republicans from coastal regions have joined Democrats to kill bills
that would raise homeowners’ insurance rates.
SB 1770 could break
that trend, despite the fact that it could bring hundreds or thousands of
dollars in higher insurance costs for homeowners. It passed its final committee
Wednesday in a unanimous vote.