An outgoing state legislator blasted state-run insurer Citizens Tuesday for asking for a 7.5 percent rate increase after raising premiums far higher through “backdoor” means and handing $50 million to a start-up company to take its customers.
Stand up and say no, former Rep. Mike Fasano, R-New Port Richey, told state regulators at a rate hearing in Tampa.
“They’re giving away $50 million of ratepayers’ money and they’re coming to you to ask for another rate increase,” said Fasano, who has taken a job as Pasco County’s Tax Collector. “Shame on them.”
Citizens president Barry Gilway defended the proposed increase as a balanced attempt to move toward “rate adequacy while realizing these rates do affect real people.”
Public comments will remain open for 10 days and the state’s Office of Insurance Regulation will decide on the request after that.
The latest rate request, to take effect in 2014, is not the whole story, Fasano said.
Many customers have seen their bills rise far more than 10 percent because Citizens has boosted premiums by other means, such as increasing the projected cost of replacing the home or stripping credits for storm-resistant discounts.
Fasano made indirect reference to a deal to pay up to $52 million to start-up insurer Heritage Property & Casualty Insurance Co., which gave $110,000 to Gov. Rick Scott’s Let’s Get to Work committee in March.
Citizens officials have defended that agreement — and others that involved giving money to private insurers which take its customers — as an innovative way to shrink the state-run insurer’s risk exposure. House Speaker Will Weatherford said he has “serious concerns” about that deal and legislative leaders have scheduled a review of laws governing how the last-resort carrier can use its ratepayers’ money in this way.
In Palm Beach County, rate increases would average 6.3 percent in coastal areas and 6.2 percent elsewhere. That’s below a 10 percent state cap on annual Citizens rate increases, one indication rates for many area homeowners are already reaching a level the company considers adequate.
The state’s biggest insurer, Citizens has a little more than 1.2 million customers statewide and about 124,000 in Palm Beach County.
Statewide, inland homeowners would pay an average of 7.3 percent more for property insurance in 2014, but the average for many coastal residents will be closer to 10 percent.
“Citizens continues to raise premiums through the back door,” Fasano told regulators. “Don’t let them do this any longer.”
Comments will remain open for 10 days on a state hearing on the proposed 7.5 percent Citizens rate increase:
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