Citizens Deal Questioned by Lawmakers

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In the last 16 months, more than 300,000 homeowners policies have been taken by private insurers from the state-run Citizens. In only one deal, did the state offer a bonus but on a three to two vote, Citizens board voted to pay up to 52 million dollars to Heritage Insurance for taking 60 thousand policies.

"We have reduced our exposure for the upcoming hurricane season by about 16 billion dollars," said Michael Peltier.

But the House Speaker is questioning the deal. He's asked Representative Doug Holder’s Regulatory Affairs Committee to investigate.

"We just want to make sure that it happens in a way that is beneficial to policy holders," said Rep. Doug Holder.

The bonus deal works out to just over 850 dollars per policy but state law limits any bonus payments to a maximum one hundred dollars per customer.

To get around the law, the limits bonus payouts to take out companies to 100 dollars a policy, Citizens is allowing Heritage to act as the insurer of record since January earning all the premiums that have been paid since then with none of the risk.

Longtime Citizens critic Representative Mike Fasano, says it's a corporate give away.

"It's the scheme of a century. It's something that probably Bernie Madoff would be very proud of," said Rep. Mike Fasano.

Watchdog group Policyholders of Florida, says the deal uses cash that could be used to pay claims.

"So this is a cash out the door onto the street to a new business. Hoping that the business succeeds," said Kevin Cate.

Tower Hill will take over 25,000 Citizens policies on June 4th, and receive no bonus at all.


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