TALLAHASSEE (AP) - Gov. Rick Scott wants lawmakers to produce a bill that would sharply curtail the amount of business that state-backed Citizens Property Insurance Corp. could write, but he isn't calling for closing the overexposed, underfunded insurer, a leading insurance executive and former state lawmaker said Monday.
Locke Burt, president of the Ormond Beach-based Security First Insurance, said he met with Scott and his staff on March 7. He said the new governor simply wants Citizens as a viable last-resort opportunity that is solvent enough that many of the state's taxpayers wouldn't have to make up the difference on potential losses.
"Gov. Scott was elected to reduce the size of government, and I think it's fair to say he'd like to reduce the size of Citizens quickly," Burt said. "In my meeting with the governor, we never talked about eliminating (Citizens). We talked about shrinking it."
In his campaign pledge to bring 700,000 new jobs to Florida in seven years, Scott promised to work the Legislature "to eventually eliminate the government-run program's reliance on assessments following a major disaster and ensure that Citizens consistently operates on actuarially sound rates."
Florida lawmakers have struggled for years trying to contain Citizens' growth.
"They realize that it's deviated from its primary purpose and goal and it's a potential disaster brewing that they want to deal with quickly," said Roger Desjadon, chief executive officer of the Boca Raton-based Florida Peninsula Insurance Company. "I think the governor and much of the Legislature have become painfully aware that Citizens has kind of lost its true north. The original intent was to be a market of last resort, not a market of first resort."
Florida Peninsula Insurance is one of roughly three-dozen "start-up" companies that have entered the property insurance marketplace since the state was ravaged by eight major hurricanes in 2004 and 2005 in hopes of drawing down Citizen's book of business. But Citizens - a government entity able to assess anyone in the state who carries insurance on a home, business or vehicle - offered far less expensive rates in most cases.
"Citizens is insuring people at a deep discount," Desjadon said. "It changes the market rather dramatically."
Created by the Legislature in 2002 to provide insurance to homeowners in high-risk areas and those who cannot find coverage in the private market, Citizens now has slightly more than 1.3 million customers. It's grown by nearly 30 percent in the past three years despite efforts by lawmakers to cut it down in size and reduce the risk to the state and every person in Florida who has insurance on a vehicle, home or business.
"With the position we're in now, Florida taxpayers would be on the hook for a major storm or hurricane," said Lane Wright, the governor's spokesman. "That's not acceptable."
State Farm spokesman Chris Neal said Monday it would be impossible to eliminate Citizens.
"They have 1.3 million customers," Neal said. "Where would they go?"
None of the legislative proposals moving through committees this session has a blueprint to eliminate Citizens, which reached its zenith in late 2007 with roughly 1.4 million customers. One proposal would prohibit Citizens from selling policies to cover new construction or remodeling of existing homes in environmentally sensitive and high-risk coastal areas.
"We all have the same goal," Citizens' spokeswoman Christine Ashburn said Monday. "We'd like to see the growth stop."
Lawmakers now permit Citizens double-digit rate increases to shore up the company's financial solvency and eliminate some competitive disadvantages for commercial companies. State Farm is the largest private commercial property insurer with roughly a half million customers.
Burt, however, doesn't believe the legislation for reducing Citizens' role in the Florida insurance marketplace goes far enough to meet Scott's goals.