Citizens Property Insurance Corp.'s chairman on Monday called for an independent review of a $350 million loan program designed to coax private companies to take some of the state-backed insurer's riskier policies.
Following a series of queries that included a letter from the incoming House speaker, Citizens Chairman Carlos Lacasa called for outside experts to review the plan, known as the surplus note program. Backers say the program could reduce the ranks in Citizens by up to 350,000 policies.
The plan, which would offer up to $50 million in low-interest loans to individual companies willing to take customers out of the state-run pool, has raised questions from some lawmakers, insurance industry representatives and the state's insurance consumer advocate since it was approved by the Citizens board last month.
"An outside assessment will give the public added confidence that, if we move forward with the SNP, we are doing so with all available information and a firm understanding of its potential impact on our policyholders and Florida taxpayers," Lacasa wrote in a letter to Citizens President and CEO Barry Gilway.
Brought on board this summer, Gilway has said he hopes to take advantage of low interest rates to close on a deal by the end of the year. The plan would provide 20-year, low-interest loans to companies willing to take out Citzens policies for at least 10 years.
"My staff and I truly believe this program will help our policyholders and serve the public interest," Gilway said in a letter to Rep. Frank Artiles, R-Miami.
On Friday, incoming House Speaker Will Weatherford, R-Wesley Chapel, joined a growing list of legislators asking Citizens to take its time. In a letter to Lacasa, Weatherford said he is wary about the lack of legislative input up to this point on a program "that affects the well-being of so many Floridians."
"I am concerned that the board's aggressive timeline will result in the program's implementation before the two chambers of the Legislature complete hearings on this important matter of state policy," Weatherford said.
Among other concerns, critics wonder why the program is only open to existing companies and why there is such a push to close a deal before the end of the year. Last month, Artiles requested a slew of documents from Citizens surrounding the surplus notes program, including the speed at which it is being pursued.
Gilway's response has been consistent: The loan program is a prudent and cost-effective way to address concerns that Citizens is overexposed.
"I assure you that the only sense of urgency I feel is to do what I was hired to do: provide a complete and thorough analysis of all options available to Citizens to help return it to its original purpose and to do so in a way that benefits both taxpayers and Citizens policyholders," Gilway wrote.
Weatherford, however, said in its haste, Citizens may be overstepping its bounds by approving the distribution of up to $350 million. He also made it clear the Legislature wants to weigh in on the matter.
"Please be assured, this letter is not intended to place a chilling effect on efforts to achieve our shared goal," Weatherford wrote. "Rather, it is an indication of my commitment to ensuring that good ideas are identified and fully analyzed through a public and transparent process."
