About nine months ago, an insurance company named Heritage Property and Casualty Company, opened up for business and contributed $110,000 to Governor Rick Scott’s campaign. Now, the company could receive up to $52 million from the state-run Citizens Property Insurance Corporation for taking over 60,000 policies for Citizens. Rick Scott’s office denied that the Governor had any influence over the deal. Some of the details surrounding the deal are troublesome. The deal was brokered in less than a week and Heritage’s president, Richard Widdicombe, has a history of breaking insurance rules. Two companies that he ran racked up hundreds of violations and thousands in fines, including failure to pay claims timely, using unlicensed insurance adjusters, and making misleading advertisements. Additionally, Heritage’s lobbyist is Tom Gallagher, a former insurance commissioner who helped create Citizens and the firm that he currently works for is operated by Citizens’ former general counsel. The firm was paid between $60,000 and $110,000 to lobby on Heritage’s behalf. The deal prompted State Representative Mike Fasano from New Port Richey to tweet, “Sadly, Tallahassee is for sale.”
Citizens says that the deal reduces risk by $400 million and exercised due diligence in striking the deal in order to meet Rick Scott’s mandate to downsize quickly and aggressively. Heritage will have to cover any losses under the Citizens policies that they are assuming, however Heritage can pick which policies they will cover and are only selecting low-risk policies to assume. Homeowners who receive letters from Heritage that they are taking over for Citizens have 30 days to opt out or will automatically become insureds of Heritage Property and Casualty.