Scrutiny on Florida’s Citizens Property Insurance Amid Climate Change Concerns

The U.S. Senate’s Budget Committee, led by Chairman Sheldon Whitehouse, has launched an inquiry into Florida’s Citizens Property Insurance Corp, focusing on its strategies for managing potential underwriting losses from extreme weather events.

This scrutiny comes amidst growing concern over Florida’s exposure to climate-related property losses and the expanding market share of Citizens. Whitehouse expressed apprehension that federal bailouts might be sought if Citizens cannot cover its losses, posing a significant risk to American taxpayers. In response, Citizens’ officials assert the firm’s financial robustness, citing Florida law that mandates surcharges on policyholders to cover deficits, thus precluding the possibility of insolvency. Despite concerns, Citizens’ outlook appears to be improving, with recent legislation aiding in reducing claims lawsuits and increasing flexibility in managing reserves.

However, Whitehouse’s letter to Citizens’ CEO and Florida Insurance Commissioner stresses the long-term economic impacts of climate change on property values, insurance premiums, and federal finances, echoing the deep-seated challenges faced during the 2008 financial crisis.