Friday, May 24

Sen. Sheldon Whitehouse sends letter to Citizens Insurance CEO, fears Fla. may seek federal government bailout

A U.S. senator from Rhode Island wants answers regarding the financial shape of Florida’s Citizens Property Insurance.

Gov. Ron DeSantis remarked last month that Citizens Insurance is not solvent. That statement set off alarms with U.S. Sen. Sheldon Whitehouse, D-R.I., who fired off a letter this week seeking assurance from Florida’s insurer of last resort.

“Citizens can’t meet its obligations, and they are so big that Florida comes to the United States government asking for a bailout,” Whitehouse said in December.

The senator’s insurance investigation started in December, and those concerns are still alive.

Whitehouse wrote this week that Citizens CEO Tim Cerio has not provided requested information to a Senate committee.

“The fact we are not actuarily sound does not mean we cannot pay claims,” Cerio said in an interview with WPTV in January.

That is essentially what Citizens said Cerio has told Whitehouse.

When WPTV spoke with Cerio earlier this year, he explained that nearly all Floridians would bail out Citizens if they couldn’t handle it financially.

“If we have a major catastrophe, we pay claims, we exhaust our reserves, we tap into reinsurance and that is exhausted,” Cerio said. “We can always pay claims because we have the ability to assess the other policyholders in Florida, whether they’re with Citizens or not.”

Cerio in a statement also said he can’t think of any scenario in which Citizens would seek federal help.

But in Washington, D.C., there are doubts.

“The problem is that climate change is causing sea levels to rise, and in tandem with worsening hurricanes, that can create very significant insurance exposure,” Whitehouse said in December.

The senator said in a Tuesday statement posted on his website that “Citizens has failed to cooperate with our investigation.”

Cerio told WPTV in January that Citizens had a surplus of $4.5 billion and this week they stated they have the reserves and coverage to handle a 1 in 100-year storm on their own.

Read the full letter Whitehouse sent to Cerio on March 18 below:

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