Senate committee investigates Florida's insurer of last resort

It will look into its financial viability

Senate committee investigates Florida's insurer of last resort

Insurance News

By Mika Pangilinan

The US Senate Budget Committee has initiated an investigation into the financial viability of Citizens Property Insurance Corporation, known as Florida’s insurer of last resort.

In a letter addressed to Governor Ron DeSantis and other top Florida officials, Committee Chair Sheldon Whitehouse requested documents outlining Citizens’ plans to “address increased underwriting losses from climate-related extreme weather events.”

Whitehouse shared the committee’s growing concerns about Florida’s climate exposure and Citizens’ expanding market share, which “more than doubled since 2020” to around 18%. He also drew attention to state law that allows Citizens to impose special assessments on all policyholders, potentially resulting in substantial spikes in insurance costs.

The letter went on to state that Florida might turn to the federal government for a bailout in the event of Citizens’ insolvency, adding that such a request could put the budget and American taxpayers “at substantial risk.”  

Whitehouse pointed to recent reports by Swiss Re and Munich Re suggesting that Citizens could see losses ranging from $36 billion to $162 billion, depending on the severity of future catastrophes.

“Florida is on the front line of the climate crisis, and it could take just one major hurricane to render Citizens insolvent - a fact the current governor has, himself, admitted,” Whitehouse told CNN, referring to a statement made by DeSantis earlier this year.

“As most people know, Citizens has not been solvent,” DeSantis had said to the press last March. “If you did have a major, major hurricane hit with a lot of Citizens property holders, it would not have enough to pay out.”

Citizens currently holds about 1.3 million policies. There have been attempts to keep this number down, with the Florida Office of Insurance Regulation approving private companies like HCI Group to assume some of its policies.

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