Paige St. John reported on another blockbuster insurance story over the weekend in Gov. Scott Quietly Trying to Kill Citizens Insurance. After obtaining internal government documents and emails, St. John reported:
Gov. Rick Scott has secretly pushed to kill Citizens Property Insurance before his first term ends…
In a February meeting with the industry lobbyists writing bills for the upcoming legislative session, documents show Gov. Scott’s top staff sought to force the 1.3 million property owners who now have a policy from the state-run carrier back into the private market, "phasing out Citizens completely."
…The gap would force many Florida property owners to turn to the unregulated surplus lines market, where rates are unchecked and policies are not backed by a state guarantee fund.
Not only are surplus lines’ rates unchecked, the Florida legislature passed new laws last year that make most of the policy forms and coverages offered by these carriers not subject to regulations and consumer protections that are required of Florida’s admitted insurance carriers. Many observers of Florida’s insurance market may wonder why Florida legislators would give such a competitive advantage to non-admitted foreign carriers. I wonder why smaller insurers would not opt to operate as a non-admitted surplus line insurers when doing business in Florida?
Not all of Florida’s legislative leaders appreciate Governor Scott’s view of Citizens:
"He’s clueless. The governor is clueless as to what is happening throughout the state, and the burden on homeowners and condominium owners and business owners," said Sen. Mike Fasano, a New Port Richey Republican who opposes most of the insurance legislation offered by the industry this year.
Rep. Jim Boyd, the insurance agent who filed the Citizens insurance bill largely written by the industry, said he did not share the governor’s objective.
"Our goal is simply to return Citizens to the market of last resort," said Boyd, R-Bradenton. "I think there’s always going to be a need for it, some property that can’t be written by the private market." (emphasis added)
Making Citizens Insurance an insurer of last resort has some merit. For numerous valid reasons, many think that government should not compete with private markets except as a last resort. How to accomplish this certainly invites debate.
I imagine those working for Citizens may not have a feeling of job security given Governor Scott’s views.
The "Clueless" comment by Senator Fasano sums up many of our elected leaders’ understanding of insurance law and policy. Some of the insurance laws that have been proposed will benefit only the financially strong insurance lobby. The lobby’s audience does not have the advantage of lengthy study of the industry or understand reasons why previous laws and regulations were made in the first place. The current Florida legislature has proposed laws that reverse decades of prior insurance law and regulations which were made to address valid needs and to protect consumers from companies that, time and again, proved they will not fulfill their ends of insurance contracts. For some reason, these purposes are not fully discussed by recent legislative staff reports and certainly not raised by insurance industry lobbyists.
As sad as it may be, when it comes to deep thought about the purpose and impact of insurance law, some of the rhetoric and thought found in the trailer to the comedy "Clueless" is far too similar to the thinking in Tallahassee: