TALLAHASSEE, Fla. — The CEO of Citizens Insurance said Florida's insurer of last resort is not operating in the red and has about $4.5 billion in cash on hand.
"We will always be able to pay claims," Tim Cerio said from the Citizens headquarters in Tallahassee.
He said the reason is that Citizens can tap into leveling assessments on nearly all Florida residents to help Citizens if it does run out of money.
It's part of a reason, Cerio said, that he is trying to lower the number of Citizens policies now, which is swelling to close to 1.3 million, as homeowners are holding on to Citizens rates that run lower than private insurance.
"The lower we are, artificially low and not actuarially sound, it is a risk to the pocketbooks of 83% of Floridians who are not Citizens customers," he said.
Cerio said take-out offers from private companies will continue in 2024 as the state-run company tries to also reduce its competitiveness with private insurance.
"I want Citizens to shrink back to that true insurer of last resort," he said. "Our mission is to also be there when there is nowhere else in private. What good does it do if we shrink but Floridians have nowhere else to go? That’s why we need a healthy private market."
Cerio said there are small positive signs with some private companies looking to enter the Florida market.
As for the take-out offers Citizens customers are receiving from private companies, Cerio said there is a cap that no offer now can exceed 40% of Citizens rates. And if the offer is within 20% of the Citizens premiums, those customers will continue to be moved out of Citizens.
"When you figure for most of Florida, Citizens policyholders are paying 40% below what they should be, you can see the logic," he said.