Citizens Slows Loan Program
Posted By Givens Givens Sparks || Dec 14, 2012
According to an article in today's Sun Sentinel, written by Michael Peltier, Citizens Insurance is "shelving" their plan to depopulate via loans to private insurance companies. The plan consisted of Citizens taking some of the funds from their record surplus to provide low interest loans to private insurance companies to entice these private companies to take some of insurance policies from Citizens.
Citizens CFO told a Citizens panel that other depopulation efforts have been successful, and that it would be wiser to take a longer look at this loan program. Statewide reporters have done an excellent Job lately describing the activities going on at Citizens. Last Sunday's Palm Beach Post had an article, written by Charles Elmore that identified two of the private companies that were to participate in this loan program as companies facing fines and penalties for not complying with existing state loan programs.
Tower Hill was assessed a nearly $800,000 penalty for failing to maintain a minimum $50 million dollar surplus to pay claims, and American Integrity Insurance Company was late on a payment and was assessed fees. One of the strongest points made in Elmore's is the following quote from Rep. Frank Artiles, R-Miami, "...fronting money to private insurers only adds to Florida's risk if smaller private carriers fail after a once-a-century megastorm and their claims must be covered by a state guarantee fund."