Citizens Property Insurance Chairman Jim Malone proposed privatizing part of Citizens today, even as he slammed a requirement that the insurer study the idea of shifting some of its work from its 1,160 employees to private firms.
He floated the idea of selling a chunk of Citizens to a private insurer at a board meeting today. "I’m out of ideas as to how to lower the risk….and not have this train wreck coming at us," he said.
All Florida automobile and property insurance policyholders would be forced to pay to help offset the state-run insurer's deficits if a major hurricane strikes.
Malone also criticized state lawmakers for passing over a bill to allow the state-run insurer to raise premiums by more than 10 percent a year – an idea backed by Gov. Rick Scott.
Citizens' eight board members are up for re-appointment. Scott and three other state leaders – the chief financial officer, Senate President and House Speaker – each appoint two board members. They have until Aug. 1 to either reappoint the current members or appoint new ones, said Citizens Spokeswoman Christine Ashburn.
"The legislature did the right thing I believe by encouraging the private sector to be able to charge more" with a major property insurance law approved this year, said Malone, who was appointed by former Chief Financial Officer Alex Sink, who narrowly lost a bid for governor to Scott. "It's beyond me why they couldn't have Citizens do the same thing."
He said as private insurers charge more "where are people going to go? They’re going to continue to go to Citizens."
Malone said legislation allowing hefty rate hikes for Citizens is even less likely next year: "I can't imagine anyone is going to make a tough vote in an election year."
He also took a swipe at lawmakers for requiring Citizens to study whether more of Citizens' work should be outsourced as it is by some government insurance programs in other states. The board voted to approve soliciting competitive bids for the study at the meeting Wednesday because the legislature required the study as part of the property insurance law this year.
"It's nice to know lawmakers are always anxious to find a way to raise costs," Malone said.
Neither Malone nor the other board members had any questions earlier in the meeting before approving seven contracts worth up to $109.5 million.
http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/07/privatizing_citizens_property_1.html
