WASHINGTON, D.C. – The Senate Budget Committee has launched an investigation into Florida’s property insurer of last resort – Citizens Property Insurance Corporation.
Committee Chairman Sheldon Whitehouse, a Democrat from Rhode Island, has sent a letter to Governor Ron DeSantis, the state’s insurance commissioner, and the president of Citizens Property Insurance Corporation, asking for information on how Citizens “plans to address increased underwriting losses from climate-related extreme weather events and other catastrophes”.
Specifically, the letter asks questions such as:
- “What modelling or other analysis has Citizens conducted to estimate its total potential exposure to various worst-case hurricane scenarios?”
- “What are Citizens’ current assets? What is Citizens’ total reinsurance coverage?”
- “Has Citizens considered seeking a federal bailout if it were unable to cover its losses?
Citizens was created by the Florida legislature in 2002 as an alternative for those who could not find property insurance in the private market. As Florida has faced storms like Hurricane Ian, which caused more than $112 billion in damage, and insurance companies like Farmers Insurance have left because of the risk, Citizens has become the largest property insurer in the state.
In response to the investigation, a Citizens spokesman said: “As Florida’s insurer of last resort, Citizens is structured to always be able to protect its policyholders and pay claims.
The spokesperson also says its ‘depopulation programme’ is working to move policyholders off the state programme and back to private insurers, saying, “…more policies have been removed through depopulation this year (223,307) than in 2016-2022 combined (169,227). In fact, Citizens recently revised its 2023 year-end policy count and exposure projections from 1.7 million policies and $675 billion in total exposure to 1.215 million policies and $551 billion.”
The Senate Budget Committee is seeking a formal response with documents and information by 21 December.
