TALLAHASSEE, Fla. – Pointing to a “sea of red ink,” the head of the state-backed Citizens Property Insurance Corp. described a private insurance industry Wednesday that is losing gobs of money while homeowners face soaring rates and trouble finding coverage.
“The consistency of loss across the entire marketplace is absolutely staggering,” Citizens President and CEO Barry Gilway told the House Insurance & Banking Subcommittee. “It’s not a decision that one or two companies are making. The reality is that what is occurring in the marketplace is impacting every single company in the market.”
Gilway went before the panel less than six months after lawmakers passed a measure (SB 76) to try to bolster the property insurance system. But as evidence of continuing problems, the number of policies written by Citizens has soared to more than 700,000 and is expected to climb above 1 million next year, as homeowners turn to it for coverage.
While Gilway’s presentation focused heavily on financial problems in the insurance industry, Rep. Matt Willhite, D-Wellington, asked about the impact on homeowners, citing a disabled veteran who got hit with a large rate increase.
“Where is the breaking point for the disabled military veteran, who is on a fixed income, that can’t insure their home when they are at a breaking point themselves?” Willhite asked.
With lawmakers preparing to start the 2022 legislative session in January, the meeting Wednesday did not include detailed discussions of proposals to address the problems. As an example of one idea, Rep. Tom Fabricio, R-Miramar, floated the possibility of more broadly opening the market to what are known as surplus-lines carriers, which don’t face the same regulatory oversight as more traditional insurers.
But House Minority Co-leader Evan Jenne, D-Dania Beach, pointed to numerous changes in the property-insurance system over the past two decades and questioned whether the state needs a new approach.
“Should we be moving in a completely different direction?” Jenne asked. “What we have been trying to do, a lot of it has been built on one another. Yet we continuously find the same results and find ourselves in these sticky situations. Should we be looking at something new?”
Citizens was originally created as an insurer of last resort, but it has seen huge growth since mid-2020 as private insurers have raised rates and reduced policies to try to stem…