Florida Gov. Rick Scott has signed a bill meant to continue theSunshine State's mission to return Citizens Property InsuranceCorp. to its rightful place as the last-resort propertyinsurer.

Scott signed SB 1770 late May 29, a piece of legislation he says"will bring much needed reforms to better protect the taxpayers whosupport Citizens Property Insurance."

The law establishes a clearinghouse aimed at reducing the numberof policies at Citizens, which for a variety of reasons—mainly ratesuppression—has ballooned to become Florida's top write of propertyinsurance. The clearinghouse allows new and renewed policies to beshopped to private insurers before landing at Citizens. Acomparative rate analysis would be generated.

SB 1770 prevents Citizens from insuring homes valued at morethan $1 million—a cap that gets lowered gradually until it reached$700,000 in 2017. New construction in high-risk, coastal areasafter July 1, 2014 can also not be insured by Citizens.

"This commonsense step eliminates public insurance subsidies fornew coastal constructions with a high risk of storm losses," Scottsays.

 The legislation also requires the state-run insurer tohave an inspector general. Scott says a nationwide search for thisposition is immediately starting.

"Citizens needs serious reform in order to instill the publicconfidence that should belong to the state's largest insurancecompany, which is supported by Florida taxpayers," says Scott, in astatement.

Citizens has recently been embarrassed by in-house fraud, wasteand abuse—misappropriations of funds and controversial pay raisesto executive, which Scott has demanded it return. He says Citizenshas yet to do so.

However, the bill contains no language related to Citizens'rates. The original Senate bill outlined a plan to require Citizensto be actuarially sound for new business starting Jan. 1, 2014.

The Florida House basically replaced the original SB 1770 withits own version, HB 909. Nevertheless, SB 1770 retained its number.Another provision omitted from the original Senate bill had to dowith opening Citizens up to bad-faith litigation.

The new law also expands Citizens' board from eight to ninemembers—the addition being an advocate for consumers appointed bythe governor. It also renamed the Florida Hurricane CatastropheFund the "State Board of Administration Finance Corp."

WHAT THEY'RE SAYING ABOUT SB 1770:

Barry Gilway, CEO of Citizens Property InsuranceCorp.:

"We're pleased that the Governor has signed this important pieceof legislation and have already done preparatory work to meet thetimelines outlined in the bill.

Kevin McCarty, Florida InsuranceCommissioner:

"SB 1770 is an important piece of legislation that will addressseveral property insurance issues in our state along withestablishing a Clearinghouse for Citizens.  TheClearinghouse concept will help to give consumers more choices intheir search for private homeowners insurance, while providing thebenefit of reducing Citizens overall exposure and the risk ofassessments for all Floridians."

Gov. Rick Scott:

"While this law will not be a cure-all for Citizens' manyproblems, it makes important reforms to improve thistaxpayer-backed organization."

Donovan Brown, state government relations counsel forPCI:

"As Florida stands at the doorstep of the beginning of hurricaneseason, the enactment of Senate Bill 1770 lays the foundation forfuture reforms that could address the exposure and rate inadequacyof Citizens, which subjects all Floridians to a hurricane taxliability.

PCI and its members look forward to working with allstakeholders in order to implement aspects of the Citizensclearinghouse embodied within this legislative measure, and tocollectively achieve additional solutions to return Citizens to itsoriginal concept as Florida's insurer of last resort."

Christian R. Cámara, Florida director of independentthink-tank R Street:

SB 1770 "combines fiscal responsibility and market-basedenvironmental stewardship. Although more needs to be done torestore Florida's property insurance market, Senate Bill 1770 is asmall, balanced step toward reaching that goal."

Dan Krassner, executive director of independentgovernment watchdog group Integrity Florida:

"All Florida taxpayers, whether they are Citizens customers ornot, run the risk of having to bailout Citizens, through morehidden hurricane taxes, if the organization does not performefficiently and effectively. We are confident that the newinspector general will be a watchdog for both Citizenspolicyholders and all Florida taxpayers."