Lawmakers to investigate deal with St. Pete insurer

TALLAHASSEE — Sen. President Don Gaetz, R-Niceville, announced the Senate Banking and Insurance Committee plans to investigate the deal to move policies from Citizens Property Insurance Corp. to St. Petersburg-based Heritage Property & Casualty Insurance Co., the News Service of Florida reports.

In the deal to depopulate the state-backed insurer, Heritage will be paid based on how many policies it takes over from Citizens, up to 60,000. The deal could be worth up to $52 million for the 10-month-old Heritage, according to the News Service.

As of April 30, Citizens had more than 1.27 million property insurance policies. Lawmakers argue that rather than becoming the insurer of last resort, Citizens has grown to take on a high amount of risk that leaves taxpayers vulnerable to assessments if a major hurricane hit Florida.

However, the News Service reports that in a letter to the Senate, Gaetz says he has heard concerns about the controversial May 22 deal with Heritage, and it needs to be investigated to ensure it's “in the best interest of Floridians.”

“It is very important that Citizens take action to depopulate so as to reduce its exposure due to future hurricane loss,” Gaetz wrote to the Senate, “but at the same time it is important that this be done in a financially sound manner that is transparent and open to public scrutiny.”

According to the News Service, policy takeouts are usually approved by the Florida Office of Insurance Regulations and completed in November and December. Because the Heritage takeout was approved just prior to the start of the hurricane season, a financial package was included and Citizens board approval was required. The money is intended to provide Heritage with an immediate reserve to get it through hurricane season.

House Speaker Will Weatherford, R-Wesley Chapel, had previously directed the House Regulatory Affairs Committe to review the laws governing Citizens in response to the Heritage deal.