Heritage president defends Citizens deal

Letters began rolling out to thousands of homeowners in Palm Beach County Thursday as company officials defended a $52 million deal to transfer up to 60,000 Citizens insurance customers to a start-up company that gave to Gov. Rick Scott’s political committee, but one lawmaker blasted it.

“Tallahassee is for sale and this is a perfect example,” said state Rep. Mike Fasano, R-New Port Richey. “For the governor and the other leaders in Tallahasee to ignore this blatant way of doing things and not challenging it is just unconscionable.”

The governor’s chief of staff called it “outrageous” to suggest any undue influence by Scott after a controversial 3-2 decision in a special Citizens board meeting Wednesday. Adam Hollingsworth also chided Citizens for being “tone deaf” when it comes to building public confidence, saying it should review its process for approving such deals.

In an interview with The Palm Beach Post, Heritage Property and Casualty Insurance Co. president Richard Widdicombe characterized the plan as an opportunity for Citizens customers to get better coverage, not some kind of insider deal.

Widdicombe said letters starting going out Thursday afternoon to 60,000 Citizens customers, approximately 35 percent of whom are in Palm Beach, Broward and Miami-Dade counties.

He said Heritage’s coverage is better — $300,000 liablity coverage vs. $100,000 for Citizens, for example — and its rates are often lower in Palm Beach County. The insurance company has $43 million in capital and is on its way to $60 million. “Policyholders of Citizens get a better deal,” he said.

As for the governor, “I shook hands with him once,” Widdicombe said. “My wife’s a teacher. I like what he’s doing with the teacher salaries.”

Company contributions went to Democrats as well as Republicans, he said: “We actually gave to both sides.”

Heritage gave $140,000 to GOP officials, Scott’s committee and the state party organization this year and $500 each to two Democratic state legislators, Kevin Rader of Delray Beach and Darryl Rouson of St. Petersburg, records show.

Heritage was licensed in August and gave $110,000 to Scott’s Let’s Get to Work committee in March before Citizens approved what officials called a “unique” deal. Citizens pays Heritage up to $52 million in an agreement involving a reinsurance arrangement backdated to Jan. 1, though the company won’t take customers until June.

Heritage gets $52 million only if all 60,000 homeowners go with his company, but customers have a choice to remain with Citizens, he said. Whatever money Heritage does get will be used to pay claims, buy reinsurance and pay expenses including taxes, salaries and overhead, he said.

Widdicombe said he brings 33 years of experiences to Heritage, including stints as president of three Florida-based insurers including People’s Trust Insurance Co. of Boca Raton. He said violations and fines of more than $150,000 incurred by two of the firms, for issues including claim handling and using unlicensed agents, are part of being in the business and reflect a “positive” and “necessary” oversight role by regulators.

For his part, Citizens president Barry Gilway defended what he called a “bold yet responsible step to reduce the risk to Florida taxpayers while protecting Citizens policyholders in the event of a catastrophic storm.”

“The logic behind this agreement is compelling,” he said.

Staff researcher Niels Heimericks contributed to this report.

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