The most direct way to do that is to raise its rates by more than the 10 percent a year currently allowed or to move some policyholders out of Citizens.
Scott said at a Cabinet meeting Tuesday that he wants to implement the Citizens' plan by June, the start of the next hurricane season.
He said most Citizens policyholders don’t realize they could be charged up to 45 percent of their premium, or about $1,100 on average, if there’s a rare storm, the kind that's predicted to strike once every 100 years. That's on top of an average premium of $2,000.
"Our plan is relying on something that can’t happen...relying on people who can’t write a check," Scott said.
If they can't pay the extra $1,100, Scott said policyholders could lose their insurance and their home. It's the same criticism that's made about raising Citizens' rates dramatically, an idea Scott has supported in the past.
"This is one of those situations...do you pay me now or do you pay me later?" said Citizens President Scott Wallace. He said if Citizens had been charging more years ago, its $5.7 billion in claims-paying reserves would be higher.
Wallace noted that Citizens policyholders would be able to make quarterly payments. He said he's more concerned about multiple hurricanes hitting the state, but that's also a concern for private insurers.
He outlined several ways Citizens could reduce its size and financial risk:
Raise rates by more than the 10 percent allowed each year.
Allow some financially strong surplus lines insurers, which are not fully regulated by the state, to take over Citizens policies.
Eliminate laws that allow Citizens policyholders to stay with the insurer even if a private company offers coverage.
Decrease the quality of some of the coverage Citizens offers to make private insurance more attractive.
Increase perks private insurers receive for taking on a former Citizens policy. For instance, a bonus they receive of $100 per policy could be increased.
Raise awareness about the Florida Market Assistance Program, a state program to find private insurance options for policyholders.
Wallace mentioned the idea of eliminating incentives for agents to keep policies in Citizens generally but he did not mention another idea proposed to kill a state law that has contributed to State Farm agents shifting policies to Citizens as the state's largest private insurer sheds policies.
Scott said he also wants Citizens to analyze what it would take to lure a private company into buying part of Citizens, an idea proposed by its former board chairman. Wallace said the insurer's employees can do that.