TALLAHASSEE – LAWFUEL – Legal News Network – By motion of Attorney General Charlie Crist, the Governor and Cabinet today rejected a proposed plan of operation for Citizens Property Insurance Corporation and instead ordered the state’s insurer of last resort to hold a series of public hearings before submitting a new plan.
Governor Jeb Bush, Agriculture Commissioner Charles Bronson and Chief Financial Officer Tom Gallagher also agreed with Crist’s motion to prohibit Citizens from hiring outside attorneys to sue the state for higher rates under certain circumstances, unless the hiring is first approved in public meetings by the corporation’s board of directors and by the Governor and Cabinet.
“Citizens seems to have forgotten that it was created to serve people during their time of great need. It seems to have forgotten that the people of Florida are the boss, and the corporation is there to serve them – not the other way around,” said Crist. “It’s time we remind Citizens Property Insurance of its statutory and moral duty to the people of Florida.”
Because Florida law requires that some Plan of Operation for Citizens be approved by the Governor and Cabinet by October 1, Crist proposed a provisional order to guide Citizens’ actions until a permanent plan can be submitted no later than January 31, 2007.
Crist said Citizens provides an essential function for more than 1.2 million Floridians who would not otherwise be able to obtain homeowners insurance, but said the Plan of Operation submitted by Citizens does not ensure the “efficiencies and economies” or high-quality service for policyholders as required by law. Crist noted that Citizens receives money from all Florida homeowners through assessments on their insurance bills, and earlier this year received a $715-million bailout from the taxpayers.
Under the provisional order approved today, Citizens must seek approval from its own Board of Directors and from the Governor and Cabinet before it may hire outside attorneys to sue the Office of Insurance Regulation when that agency directs Citizens to reduce or roll back rates.
Since May, Citizens has filed four petitions seeking to overturn agency orders calling for rate reductions, and in each instance hired a private law firm to sue the taxpayer-funded agency.
“Citizens used homeowners’ money to hire attorneys so they could sue the government, in order to force policyholders to pay even more,” said Crist. “The taxpayers were paying to sue themselves, so that some of them could pay even more. This is totally unacceptable.”
The Governor and Cabinet’s order requires Citizens to hold at least three public hearings around the state before the end of the year to obtain public comment on how to meet its statutory obligations related to efficiency and customer service. Citizens must then develop a new plan that includes a “declaration of rights” for policyholders.
A copy of the Governor and Cabinet’s provisions order is available