The Chair of a U.S. Senate committee is putting Florida's insurer of last resort on blast for not responding to its questions about its financial footing, amid concerns that the state may lean on the federal government to bail out the insurance market after a major hurricane.
In the wake of Gov. Ron DeSantis claiming Citizens Property Insurance is "not solvent," U.S. Senate Budget Committee Chair Sheldon Whitehouse is "renewing all requests for information and documents set out in the Committee's November letter related to the company's plans to address increased underwriting losses from climate-related extreme weather events and other disasters."
Last year, Whitehouse wrote the Governor, Insurance Commissioner Michael Yaworsky and Citizens CEO Tim Cerio with concerns about how climate risk could push Florida's insurer of last resort into insolvency.
Months later, the Rhode Island Democrat is frustrated.
"Citizens has not adequately addressed the Committee's questions and has ignored repeated attempts at follow up. In a non-responsive letter dated December 15, (Cerio) referred to a Florida law enabling the company to levy special assessments on all policyholders as a basis for its solvency," reads a press release from the committee that notes the question of whether the insurer would need a federal bailout is still unanswered to date.
"Citizens has failed to cooperate with our investigation," said Whitehouse on Tuesday.
"Governor DeSantis's repeated statements that Citizens is not solvent and the company's own public comments about their ability to shift their financial losses to Florida policyholders have done nothing to assuage the Committee's concerns about possible future requests for a federal bailout. Floridians are grappling with already astronomical insurance rates and one future storm could make things far, far worse. I look forward to Citizens' full compliance with our investigation."
The latest letter takes issue with a recurrent DeSantis claim that private companies are taking risk off the backs of taxpayers through absorbing some Citizens policies. It notes that the "offloading" consists of "often its least risky policies."
Whitehouse also suggests the company isn't complying with state law.
"As a public entity in Florida, Citizens is generally subject to the Florida Sunshine Law, which broadly states that 'all state, county, and municipal records are open for personal inspection and copying by any person" and that "(p)roviding access to public records is a duty of each agency.' Citizens' own website makes clear that it was 'created by the Florida Legislature in August 2002 as a not-for-profit, tax-exempt, government entity.' The statute governing Citizens equally makes clear that Citizens is subject to the record retention provisions of the Sunshine Law, with limited exceptions."
DeSantis has warned about Citizens' bloat in the past, comments that aren't likely to reassure Whitehouse's concerns that the state will eventually beg Washington for help.
He noted in 2022 that Citizens was "unfortunately undercapitalized" and that the company could go "belly up" if it actually had to weather a major storm.
Questionable messaging isn't just a thing of the past though. DeSantis, on successive days last year, blamed the Legislature for not implementing insurance reforms he wanted, then refused to say what those reforms were when asked directly.
The Governor also made news during a 2023 radio interview with a Boston host, when he suggested homeowners should "knock on wood" and hope the state didn't get hit by a storm.
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