U.S. Senate committee looks at insurance

by | Jun 5, 2024

The U.S. Senate Budget Committee, led by Chairman Sheldon Whitehouse, will hold a hearing on Wednesday to examine the impact of climate change on insurance markets, specifically focusing on Florida’s Citizens Property Insurance Corp., which has faced scrutiny over its financial stability and claims-paying ability.

The U.S. Senate Budget Committee, which in the past several months has raised questions about the finances of Florida’s Citizens Property Insurance Corp., will hold a hearing Wednesday about how climate change is affecting insurance markets.

The hearing, which will be held in Washington, D.C., is titled “Riskier Business: How Climate is Already Challenging Insurance Markets.” The committee, led by Chairman Sheldon Whitehouse, D-R.I., requested a wide range of information from Citizens in November and followed with another request in March that seized on a comment by Gov. Ron DeSantis that Citizens was not “solvent.”

A March news release from the Senate committee said its probe of Citizens “built on two previous, still ongoing investigations into the insurance industry’s response to climate change amid the committee’s growing concerns about the economy-wide harms from a spiraling insurance affordability and availability crisis.”

But Citizens officials have pushed back against Whitehouse’s assertions, including that Citizens might have to seek federal assistance to pay claims if it faced catastrophic losses. Citizens was created by the state as an insurer of last resort but has grown to become Florida’s largest property insurer.

During a December meeting of the Citizens Board of Governors, President and CEO Tim Cerio said a November letter from Whitehouse could cause “unwarranted panic” among Citizens policyholders and Floridians.

“I cannot over-emphasize that the assumptions in the Budget Committee’s letter suggest a fundamental misunderstanding of how Citizens Property Insurance operates, and it under-estimates our claims-paying ability,” Cerio said. “And I’m speaking now, and I need to speak to our policyholders so they hear this, Citizens is structured so it will always be able to protect its policyholders and pay claims.”


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