US Senate committee investigating Citizens Insurance over inability to cover losses

Link: https://nbc-2.com/news/state/2023/12/01/us-senate-committee-investigating-citizens-insurance-over-inability-to-cover-losses/

Excerpt:

The federal government has launched an investigation into Florida’s largest home insurance company.

Citizens Insurance, the governor, and other state leaders received a letter informing them that a Senate budget committee is looking into the state-run company.

Here’s why a Senate budget committee is looking into the company.

Citizens insure $586 billion worth of property, and they have just over $15 billion in their reserves to pay out on claims. If a major hurricane hit the state, they could be short over $571 billion, leaving everyone in the state on the hook to pay the shortfall.

The letter from the Senate committee investigating the state backed company expresses concern it may be unable to cover its losses. A claim the governor confirmed while visiting Fort Myers last year.

….

Mark Friedlander with the Insurance Information Institute said a private insurer would not be allowed to operate in the State of Florida with those financial dynamics.

Seven private companies went insolvent in the last year and a half in Florida.

“Citizens, unlike a private insurer, could never go insolvent,” Friedlander noted.

That’s because the state could initiate a hurricane tax to cover its costs which would require everyone who owns property or a car to pay a hurricane tax.

Author(s): Dave Elias

Publication Date: 4 Dec 2023

Publication Site: NBC 2, Florida Weekly