ST. PETERSBURG, Fla. — We're hearing from the man behind the congressional investigation into Citizens Insurance and whether it can pay claims or is insolvent.
Senator Sheldon Whitehouse represents Rhode Island in the U.S. Senate, but as Budget Committee Chairman, he has his sights on Florida and Citizens Property Insurance Corporation.
“It's logical for them to come to the federal government looking for a bailout,” he said Thursday to 10 Tampa Bay. “Those numbers can get very, very big.”
He wants to know if Florida would ask for a federal bailout if major disasters drained funds from state-run Citizens, sending letters to its CEO last year and again after Gov. Ron DeSantis said last month that Citizens is likely insolvent.
“We're not looking at this only as a Florida problem that might come home to roost in Congress in the form of funding for Congress,” he said. “But also, that Florida is the leading edge of sort of a national coastal property insurance and valuation challenge.”
Insurance expert Mark Friedlander says Florida will never ask Congress for a bailout because of the so-called hurricane tax that Citizens could impose on all home insurance policyholders in the state — not just those insured by Citizens.
“Citizens is solvent. It is a very fiscally sound organization,” he said. “Citizens could never go insolvent like a private insurer because of the backstop program that is in place.”
All of the back and forth is of little comfort to Citizens policyholders like Fred Kopec in St. Pete.
"I'm furious even at the thought of thinking that I would have to pay because the insurance industry in Florida has been totally mismanaged for the last 25-30 years,” Kopec said.
Florida Senator Rick Scott sits on the Senate Budget Committee. So we asked his office about his thoughts on the investigation, a possible federal bailout, and a potential hurricane tax on all insurance policyholders.
His office won't answer those questions directly but told us in part, “Senator Rick Scott has been clear that every option should be on the table until the property insurance market is fixed and all families can afford their premiums.”
The state has been pushing to shed policies from Citizens to lower the total amount of exposure.
Even with hundreds of thousands of policies moved off Citizens, it still has more than a half million too many policies for what it can reasonably handle.