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South Florida Business Journal: Key Florida lawmaker demands smaller Citizens Property Insurance

Thursday, December 06, 2012

The chairman of the Florida Senate Banking and Insurance Committee has given Florida Insurance Commissioner Kevin McCarthy one month to present a plan on how to make Citizens Property Insurance Corp. smaller.

According to The Florida Current, Maitland Republican David Simmons wants to make the state-run insurer less attractive for homeowners so it can shed many of its 1.47 million policies, putting them in the private market. Rates at Citizens are kept lower than the private market, although Citizens has taken on more risk than private insurers. Simmons believes Citizens has too much exposure.

If there is a shortfall in Citizens because of a major storm, the difference could be made up with a state bond that is funded by assessments on all insurance policies in the state.

“Our legislative leaders are taking the necessary steps to shield our residents, businesses, renters and charitable organizations who subsidize the cost and will shoulder the burden of increased hurricane taxes in the form of assessments from the inevitable next storm,” Associated Industries of Florida President and CEO Thomas C. Feeney III stated in a news release. “Florida has had seven years of luck, but we can no longer substitute wishful thinking for fiscal responsibility and wise governance. It is imperative that we act now to reform both of these underfunded state-backed programs.”

Brian Bandell covers banking, finance, health care and education. Get the latest banking industry news here.

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