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Citizens bailout inflates by 23%

Property owners around the state are expected to be on the hook for $400-million more than estimated just a month ago.

By JONI JAMES
Published March 24, 2006

The cost for bailing out Citizens Property Insurance Corp. for 2005 hurricane damage has swelled to $1.7-billion, $400-million more than anticipated just a month ago.

For Florida property insurance policyholders, the increase will mean far more expensive insurance bills next year, when Citizens' assesses all policyholders statewide to retire its debt.

This year, property insurance policyholders are paying roughly 7 percent more to retire a $516-million debt from the 2004 storms. Citizens provides insurance for property owners who can't find it on the open market. But if it cannot afford to pay claims, Citizens can assess everyone with property insurance in Florida to make up the difference.

The updated 2005 deficit number came as the House Insurance Committee Thursday approved two controversial ideas aimed at reforming Florida's insurance market, including re-establishing an elected insurance commissioner.

Under one plan, HB 551, pushed by Rep. Tim Ryan, D-Dania, future deficits incurred by Citizens would automatically be reduced with hurricane-related sales tax revenue. The Senate has yet to address an identical bill filed by Sen. Steve Geller, D-Hallandale Beach.

The bill wouldn't affect the current deficits, though Republican Chief Financial Officer Tom Gallagher and several lawmakers are pushing to use part of next year's $3.2-billion surplus in state funds to offset the 2005 hurricane-related Citizens assessment. However, legislative leaders and Gov. Jeb Bush have been cool to the idea.

Also winning approval Thursday before the House committee was a long shot proposal with bipartisan support to return regulation of insurance companies to an elected post, just three years after lawmakers converted it to an appointed one.

Under the plan, HJR 1317, voters would have to approve the idea on the November ballot. The Senate has yet to take up an identical proposal. Rep. Jack Seiler, D-Wilton Manors, and Sen. Ron Klein, D-Delray Beach, are sponsors.

[Last modified March 24, 2006, 02:15:43]