Hurricane Wilma flooded Flagler Avenue in Key West. Many coastal homeowners in southern Florida signed up for policies with Citizens following the destructive 2005 storm. (Photo courtesy of State Library and Archives of Florida.)
By Ralph De La Cruz
Florida Center for Investigative Reporting
Paige St. John of the Sarasota Herald-Tribune covers the insurance industry so well that she received the Pulitzer Prize this year for a series — two years in the making — on predatory insurance practices in Florida.
She knows her stuff.
Her latest piece about Florida insurance is just as much of a must-read, and just about as outrageous.
These days, when you say “outrageous” and “Florida,” the next two words are usually “Rick Scott.”
And that’s the case with this story.
Thanks to some digging and public records requests, St. John has found that Scott, the self-proclaimed state CEO, is secretly pushing to shut down Citizens Property Insurance.
As she explained, it’s “a goal that alarmed even representatives of private insurance companies seeking to remove Citizens as a competitor.”
So basically, Scott is not simply giving insurance companies free rein to do whatever they want in this state. He’s pushing their interests beyond what they even want.
When even insurance companies think you’re going too far, you know you’ve gone clear over the edge.
“We’re going to make this the state for everybody in business,” Scott told Bloomberg News in February.
Yep.
He’s working real hard to keep BP and insurance companies pleased.
The reasoning: deregulation of businesses will allow corporations to make more money and, in turn, create jobs and make things better for consumers.
Hey, don’t you trust BP? Don’t you remember how property insurers stepped up for Floridians after hurricanes hit five to six years ago?
Actually, it was the insurance industry’s shenanigans that led to Citizens creation in 2002, giving an alternative to Floridians who couldn’t obtain affordable insurance on the private market. After the wave of hurricanes from 2004 to 2006, Citizens became a lifesaver for coastal residents. More than 1.3 million Floridians, mostly in coastal areas, are now insured by Citizens.
So why are politicians messing with Citizens? Why would Scott want to kill it?
Must be losing money, right?
Quite the contrary.
As St. John points out in a separate story, Citizens has been wildly successful.
Citizens has accumulated a $5.1 billion surplus, while private insurers, pumping money to their parent companies and re-insurers, are struggling to survive.
In 2010, St. John reports, 42 of the 57 carriers operating in Florida reported losses of $522 million. Meanwhile, Citizens posted profits of $813 million.
And a man like Scott, who’s alleged to be a smart businessman, wants to shut down this operation? It doesn’t pass the smell test.
Sen. Alan Hays, who represents inland Lake County, is the button man for the insurance industry. He’s sponsoring insurance industry-authored legislation that would force Citizens to reduce coverage and raise rates as well as other bills that would deregulate private insurance carriers. According to Hays, Citizens doesn’t have “respectful” reserves.
You might remember Hays as being the author of another snazzy piece of legislation this session: the anti-Sharia law bill — although Hays couldn’t name a single case in state court in which Sharia law had been a problem.
The Orlando Sentinel observed that watching Hays in the Senate “is like watching Moammar Gadhafi set loose in a gun shop with an unlimited gift card from Grandma. Hays is running wild, and it promises to be a fully automatic, double-barreled Christmas for the insurance and development industries, among his biggest backers.”
Voters of Umatilla, why have you done this to the rest of us?
By the way, the reason the industry wants Citizens to raise rates is so they can raise theirs.
Seems I’m using this phrase almost weekly this session but … this is scandalous.
And does anybody still remember the promise that barely nudged (along with $73 million of his personal fortune) Rick Scott into the CEO’s mansion in Tallahassee? Something about creating 700,000 jobs in seven years?
What, you have to wonder, does all this have to do with creating jobs?