TALLAHASSEE, Fla. — There's more political fallout after Farmers Insurance announced its departure from Florida's wobbly property insurance market.
The company said Tuesday it was leaving the Sunshine State to "effectively manage risk exposure." Industry insiders said about 100,000 policies would be impacted.
Republicans continue to push the narrative that Farmers' financials are to blame and not recent reforms, which included reinsurance programs and cutting incentives to sue insurers. The Florida House Speaker was the latest to chime in with a post on social media.
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Rep. Paul Renner said in part: "While our reforms will take time to take effect, we put the right systems in place to strengthen our insurance market and provide Floridians with the access to coverage and peace of mind they need for their property."
Meanwhile, Florida's state-backed property insurer of last resort, Citizens, remained committed to a double-digit rate hike later this year. At a board of governors meeting Wednesday, CEO Tim Cerio said the organization needed the increase to offset the evergrowing number of policyholders.
"Unfortunately, the state's residual insurer, the insurer of last resort, has become the largest insurer in Florida," Cerio said.
Citizens currently has more than 1.3 million property insurance policies, an increase of more than 170,000 since January. It's on track to hit 1.7 million by year's end. Cerio told governors Citizens was too competitive with private companies and needed the approval of a more than 13% rate hike, which is still pending with state regulators. Their approval would make it effective in November of this year.
"Nobody wants to pay more for insurance," said Cerio. "But, even if OIR approves our requested rate increase, our policyholders will still be paying on average about 44% below the rest of the private market."
That may be, but new Citizens policyholders like Willie Butts still don't like the sound of it. His coverage under Citizens had already increased by more than a grand after switching from a private carrier that was ready to jack up his rates even higher.
"I had no other choice in that move," said the disabled veteran from Apopka, who felt lawmakers weren't doing enough to fix things. "I do know that this is something that cannot be ignored any longer because it's only going to get worse."
Florida's GOP majority remains confident in the changes made within the last year and a half. They continue to urge patience, saying the foreign reinsurance market is becoming more "bullish" towards Florida and that the state's glut of litigation needs about a year to work itself out of the legal system.
"I've got contacted by a number of investment groups that say, 'Hey, I want to come to Florida, I want to start up, I want to bring an insurance carrier there,'" Florida CFO Jimmy Patronis said in May. "But these guys don't want to come here until November. You can't blame them— they're going to wait until after hurricane season."
Democrats, however, are not buying it.
"Let me say this to make things very clear-- trickle-down economics doesn't work, and neither does trickle-down property insurance," said House Minority Leader Rep. Fentrice Driskell (D-Tampa). "What we saw was a three-billion-dollar bailout for insurance companies."
A group of them, Wednesday, said the GOP had mismanaged the crisis. They called for tougher regulation and pushed for the state to use its budget surplus to create easier access to reinsurance through Florida's catastrophe fund.
"We are sitting on billions of dollars in surplus that's supposed to be available for a rainy day," said Rep. Hillary Cassel (D-Hollywood). "Ladies and gentlemen, we're in the middle of a storm — we're no longer waiting on a rainy day. This is a flood like we've never seen."
But with no new special sessions on the horizon, ideas like that would have to wait for the next regular session. That gavel won't drop until January of next year.
