{"id":42753,"date":"2024-03-09T13:02:03","date_gmt":"2024-03-09T18:02:03","guid":{"rendered":"https:\/\/lakelandgazette.info\/news\/?p=42753"},"modified":"2024-03-09T13:02:09","modified_gmt":"2024-03-09T18:02:09","slug":"desantis-insists-floridas-largest-insurer-is-broke-it-has-5b","status":"publish","type":"post","link":"https:\/\/lakelandgazette.info\/news\/2024\/03\/09\/desantis-insists-floridas-largest-insurer-is-broke-it-has-5b\/","title":{"rendered":"DeSantis insists Florida\u2019s largest insurer is broke. It has $5B."},"content":{"rendered":"\n

Many Florida residents are understandably confused by their state\u2019s tumultuous property insurance market.<\/p>\n\n\n\n

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One of them appears to be Gov. Ron DeSantis, who has incorrectly warned several times that the state-backed insurance program, with 1.2 million policies and $17.8 billion in reserves, is \u201cnot solvent.\u201d<\/p>\n\n\n\n

The Republican\u2019s misstatements helped trigger a U.S. Senate investigation and have been repeated by news outlets as Florida residents struggle to maintain property coverage in a volatile market with the highest average premiums in the nation.<\/p>\n\n\n\n

The governor has stated at least three times since late 2022 that Florida Citizens Property Insurance Corp. is \u201cnot solvent,\u201d most recently in a Feb. 28 appearance on CNBC. Some political analysts speculate that DeSantis is trying to influence the Florida Legislature against expanding the program.<\/p>\n\n\n\n

Florida Citizens\u2019 financial reports<\/a>, made public in December, show a $5 billion surplus at the end of 2023 and project a $6.3 billion surplus at the end of 2024. Additional financial backing from state funding, along with Citizens\u2019 taxation authority and other sources, brings the insurer\u2019s total reserves for paying claims to nearly $18 billion, the report shows.<\/p>\n\n\n\n

DeSantis\u2019 deputy press secretary Julia Friedland acknowledged to E&E News that Citizens has bottomless financial capacity, derived from its ability to impose fees on nearly every insurance policyholder<\/a> in Florida, from motorists to homeowners, including millions of people who are not Citizens customers.<\/p>\n\n\n\n

\u201cCitizens is structured so that it will always have the ability to pay claims,\u201d Friedland said in an email Wednesday.<\/p>\n\n\n\n

But noting the enormous surge in Citizens\u2019 policy count, which began months after DeSantis took office<\/a> in 2019, Frieldland said, \u201cCitizens was never meant to house as many policies as it currently does, therefore at its current growth rate, Governor DeSantis is correct.\u201d Frieldland did not explain why DeSantis calls the program \u201cnot solvent.\u201d<\/p>\n\n\n\n

\u201cNot solvent\u201d means Citizens would be unable to pay all of its claims and other expenses.<\/p>\n\n\n\n

Created by state law and run by political appointees, Citizens is Florida\u2019s so-called insurer of last resort and is required to sell property coverage to any resident who cannot buy a policy from a private insurer. Most states have similar state-chartered insurers.<\/p>\n\n\n\n

As traditional insurance companies in Florida have become insolvent or withdrawn from the state, Citizens has become the state\u2019s largest property insurer and an essential component of Florida\u2019s $1.4 trillion economy. Citizens has grown to provide nearly 20 percent of Florida\u2019s property insurance.<\/p>\n\n\n\n

DeSantis\u2019 issued his most detailed warning about Citizens at a March 17, 2023, news conference<\/a> while discussing Florida\u2019s recovery from the devastation caused by Hurricane Ian.<\/p>\n\n\n\n

\u201cCitizens has not been solvent,\u201d DeSantis told reporters in heavily damaged Fort Myers. \u201cIf you did have a major, major hurricane hit with a lot of Citizens property holders, it would not have enough to pay out.\u201d<\/p>\n\n\n\n

DeSantis\u2019 comments about unpaid claims was a sharp reversal from remarks he made months earlier after Hurricane Ian caused billions of dollars of damage as one of Florida\u2019s most destructive storms.<\/p>\n\n\n\n

\u201cCitizens, I think right now they\u2019re between $6 [billion] and $7 billion of surplus,\u201d DeSantis said during a hurricane update on Sept. 28, 2022.<\/a> \u201cTheir modeling, based on paying out a lot of money in claims for this, was that they would still have between $4 [billion] and $5 billion in surplus.\u201d<\/p>\n\n\n\n

\u201cFor Citizens, they feel very strongly that they\u2019re going to be able to handle this and still have pretty significant reserves,\u201d DeSantis added.<\/p>\n\n\n\n

DeSantis\u2019 statements about insolvency have drawn little notice in Florida. But in Washington, Senate Budget Chair Sheldon Whitehouse (D-R.I.) referred to them when launching an investigation into Citizens and whether Florida would seek a federal bailout for the program.<\/p>\n\n\n\n

In a Nov. 30 letter to Florida officials<\/a> including DeSantis, Whitehouse quoted verbatim from the governor\u2019s warning eight months earlier that Citizens would not be able to pay claims.<\/p>\n\n\n\n

\u201cIn light of the state\u2019s acknowledgment of Citizens\u2019 potential insolvency,\u201d Whitehouse wrote, the Budget Committee \u201cis concerned that Citizens and the State of Florida would turn to the federal government to bail them out.\u201d<\/p>\n\n\n\n

Citizens CEO Timothy Cerio replied to Whitehouse on Dec. 15<\/a> in a letter that undercut DeSantis\u2019 assertions about the insurer\u2019s financial health.<\/p>\n\n\n\n

Whitehouse\u2019s concern about Citizens\u2019 solvency, Cerio wrote, shows \u201ca fundamental misunderstanding\u201d of how Citizens operates and of its ability to pay insurance claims.<\/p>\n\n\n\n

\u201cAs Florida\u2019s insurer of last resort, Citizens is structured so that it will always be able to protect its policyholders and pay claims,\u201d Cerio wrote, ignoring Whitehouse\u2019s questions and document requests.<\/p>\n\n\n\n

Cerio repeated that assertion in an email to E&E News on Wednesday. But he did not challenge DeSantis\u2019 misstatements and said Citizens faces financial trouble because its premiums are too low.<\/p>\n\n\n\n

\u201cCitizens\u2019 rates are currently actuarially unsound,\u201d Cerio said, noting that state law restricted Citizens from raising average premiums by more than 13 percent. Citizens says its premiums are 55 percent<\/a> below their proper level and, in some areas, 40 percent below rates charged by insurance companies.<\/p>\n\n\n\n

A Whitehouse spokesperson didn\u2019t respond to a request for comment.<\/p>\n\n\n\n

Mark Friedlander, a spokesperson for the industry-backed Insurance Information Institute, said that DeSantis\u2019 comments about solvency \u201cmay have been reacting to\u201d an effort by some state legislators to vastly expand Citizens. The legislation has gone nowhere.<\/p>\n\n\n\n

On Dec. 1, 2022, just before state lawmakers convened a special session initiated by DeSantis to address property insurance, the governor issued a warning about Citizens going \u201cbelly up\u201d after noting that \u201csome people say everyone should just go on [Citizens].\u201d<\/p>\n\n\n\n

Friedlander said Citizens is \u201cvery strong financially\u201d and \u201ccan never go insolvent like a private insurer.\u201d<\/p>\n\n\n\n

DeSantis\u2019 warnings have come as Citizens\u2019 board, led by DeSantis appointee Carlos Beruff, has tried to improve its finances by shifting policyholders to private insurers and raising its premiums.<\/p>\n\n\n\n

The number of Citizens\u2019 policies dropped to 1.17 million in January from 1.41 million in September. The decline came after Citizens\u2019 policy count shot up from 420,000 in early 2019, which raised concerns that private insurers would no longer cover property in parts of Florida that are vulnerable to climate change and intensifying hurricanes.<\/p>\n\n\n\n

DeSantis and the Florida Legislature approved new laws aimed at encouraging insurance companies to operate in Florida.<\/p>\n\n\n\n

\u201cYou\u2019ve got to have a solvent private market,\u201d DeSantis said in 2022. \u201cYou can\u2019t dump everybody on Citizens Property Insurance. It\u2019s not solvent.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Many Florida residents are understandably confused by their state\u2019s tumultuous property insurance market. One of them appears to be Gov. Ron DeSantis, who has incorrectly warned several times that the… <\/p>\n","protected":false},"author":2,"featured_media":31581,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"wpai_generated_summary":"","footnotes":"","jetpack_publicize_message":"{title}\n\n{excerpt}\n\n{url}","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"dois","default_image_id":71799,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[15],"tags":[7772],"class_list":["post-42753","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics","tag-desantis-insists-floridas-largest-insurer-is-broke-it-has-5b"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/42753","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/comments?post=42753"}],"version-history":[{"count":1,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/42753\/revisions"}],"predecessor-version":[{"id":42754,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/posts\/42753\/revisions\/42754"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/media\/31581"}],"wp:attachment":[{"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/media?parent=42753"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/categories?post=42753"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lakelandgazette.info\/news\/wp-json\/wp\/v2\/tags?post=42753"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}