WASHINGTON (June 5, 2012) – The R Street Institute today welcomed a letter from three Florida state senators and 22 state representatives supporting Citizens Property Insurance Corp. Interim President Tom Grady’s efforts to slow the growth of the state-run insurer, now the largest property insurer in Florida.
The letter to Grady encouraged Citizens’ board to continue its efforts to return Citizens to being an “insurer of last resort” and reduce the need to tax all Floridians for future shortfalls that would follow a costly storm season. In recent months, Citizens has suspended certain coverages and embarked on a property reinspection process to ensure that discounts are properly applied. The board also is currently reevaluating whether a 10 percent cap on annual rate increases, voted into law in 2010, applies to policies written for new Citizens customers.
“We understand and share the desire for lower homeowners insurance rates,” the lawmakers wrote. “However, Floridians who are currently paying full-price for their insurance in the private market don’t deserve to pay a subsidy for those on Citizens.  We are greatly encouraged by the board’s desire for reform and its willingness to tackle this very complex and difficult issue.”
R Street President Eli Lehrer and Public Affairs Director R.J. Lehmann co-authored a paper published in January by the James Madison Institute, Workable Solutions for Florida’s Challenging Insurance Problems, that proposes steps to gradually depopulate Citizens and reduce the exposure of the Florida Hurricane Catastrophe Fund.
“Property insurance long has been a hot button political issue in Florida and these lawmakers should be commended for having the political bravery to publicly acknowledge that allowing Citizens to become the largest insurer in the state is not a sustainable solution,” Lehmann said. “Florida has been tremendously fortunate in avoiding a major hurricane strike for six successive seasons, but that luck can run out at any moment, and it is imperative that steps be taken to avoid the worst before it’s too late.”
The three senators to sign the letter were Sen. Garrett Richter, chair of the Senate Banking and Insurance Committee; Sen. Don Gaetz, chair of the Senate Reapportionment Committee;  and Sen. Alan Hays, chair of the Senate Budget Subcommittee on General Government Appropriations.
House signatories included Reps. Bryan Nelson and Ben Albritton, chair and vice chair, respectively, of the House Insurance and Banking Subcommittee; Rep. Stephen Precourt, chair of the House Finance and Tax Committee; Rep. Lake Ray, alternating chair of the Joint Administrative Procedures Committee; and seven other subcommittee chairmen.  It also was signed by Rep. Bill Hager, a former Iowa insurance commissioner who represents the South Florida counties of Broward and Palm Beach.
Together, the lawmakers represent more than half of Florida’s 67 counties, including Alachua, Bay, Brevard, Broward, Collier, Columbia, Clay, Dixie, Duval, Escambia, Gilchrist, Hardee, Highlands, Hillsborough, Holmes, Jackson, Lafayette, Lake, Lee, Manatee, Marion, Okaloosa, Okeechobee, Orange, Osceola, Palm Beach, Polk, Santa Rosa, Seminole, St. Johns, Sumter, Suwannee, Volusia, Walton and Washington.
R Street is a non-profit public policy research organization that supports free markets; limited, effective government; and responsible environmental stewardship.  It has headquarters in Washington, D.C. and branch offices in Tallahassee, Fla.; Austin,Texas; and Columbus, Ohio. R Street’s co-founders previously were the staff of the Heartland Institute’s Center on Finance, Insurance and Real Estate. Its website is www.redesign.rstreet.org.

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