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Politics

Crist pushes Citizens changes

He asks legislators to consider a bill expanding the insurer's presence.

By JENNIFER LIBERTO
Published April 4, 2007

TALLAHASSEE - Gov. Charlie Crist is using his office as a bully pulpit to move insurance legislation that would make state-run insurer Citizens Property Insurance even more competitive while protecting its tax-exempt status.

Crist told the St. Petersburg Times editorial board this week that he recently called the two chairmen who run insurance committees - Sen. Bill Posey and Rep. Ron Reagan - to see if they would give a hearing to a Citizens bill that isn't going anywhere.

"I think some of these members have a right to have their bill heard," Crist said Monday. "They might not pass, but at least let's give them the light of day."

The bill addresses a number of insurance issues.

For example, it would attempt to strengthen Citizens' federal tax-exempt status, to prevent the IRS from revoking it now that the insurer can compete directly with other insurers. The bill says that allowing Citizens to compete helps reduce Floridians' insurance rates, which is a "compelling public interest."

Florida Chief Financial Officer Alex Sink has not yet taken a position, but spokeswoman Tara Klimek said the benefit of shoring up the state-run insurer's tax-exempt status is that Citizens' reserves would be protected, giving it more money to pay claims and less chance of assessing Floridians in the case of hurricanes.

She said the IRS could argue that Citizens is no different from a private company created by the state.

The bill also broadens opportunities for policyholders to get into Citizens, an issue Crist pushed during the recent special session. The House balked, however.

The bill would expand a recent law that allows policyholders to choose Citizens if their private insurer charges 25 percent more than what Citizens charges. Under the new bill, just about anyone could go with Citizens, no matter what their insurer charged.

The bill would also get rid of Florida-only subsidiary insurance companies, or pups. And it would require all insurers that are subsidiaries to report their parent company profits, an issue the House and the governor had originally wanted going into the special session.

Posey's staff said the bill Crist asked about is on the agenda for the Banking and Insurance committee on Monday. Reagan said that his staff was looking at the bill and that "it has not been put on the agenda and won't be until we know what the heck is in the bill."

State Farm lobbyist Mark Delegal said he was surprised that the bill was moving.

"We ought to let what just passed have a chance to work, before we start changing the rules of engagement, yet again," Delegal said.

Another lobbyist representing many Florida businesses said Tuesday he is strongly opposed to Citizens' expanded role, using the term "death spiral" to describe the state's property insurance reform plan. Barney Bishop III, president of the Associated Industries of Florida, said he is concerned that competition from Citizens - combined with compulsory rate reductions for private insurers - could force companies like Nationwide to flee a state in which they can't make money.

[Last modified April 4, 2007, 06:20:05]