Citizens Property Insurance Corp. must use public input to improve customer relations and cannot hire outside attorneys to sue the state over rate disagreements without approval, Gov. Jeb Bush and the Florida Cabinet decided Tuesday.

Citizens sought approval of its plan of operations from the governor and Cabinet but Attorney General Charlie Crist proposed that it first hold at least three public hearings to gather public input for strengthening service for policyholders.

The plan of operation that was rejected Tuesday was initially approved by the Office of Insurance Regulation in June. It will be in effect until a revised, permanent plan that incorporates the public input is submitted before Jan. 31. The new plan must include a policyholders' declaration of rights.

Since May, Citizens has submitted four legal filings stemming from a disagreement with the Office of Insurance Regulation over rates charged in Monroe County.

"The taxpayers were paying to sue themselves, so that some of them could pay even more," said Crist, a candidate for governor, in a statement. "This is totally unacceptable."

Citizens applied for statewide increases in December and January, Scott said. In May, the insurer was ordered to re-evaluate Monroe County rates. It was then ordered to reduce Monroe County's rates by 35 percent.

The legal filings were submitted to the Office of Insurance Regulation and the Division of Administrative Hearings by the law firm Radey Thomas Yon & Clark in Tallahassee. The legal bill was $22,000, Scott said.

Citizens, a nonprofit public corporation created by the state legislature, insures more than 1.2 million Floridians who could not get coverage elsewhere.

Last week, Citizens' Board of Directors approved a 2 percent assessment on the premiums of all Florida homeowners that will be used to overcome a $1.7 billion deficit from 2005. Earlier this year, Citizens also received $750 million in surplus tax dollars.

Crist's Democratic gubernatorial opponent, U.S. Rep. Jim Davis, said Crist was getting tough on Citizens too late so he would look good for voters. Davis' campaign released a statement noting that the Cabinet has oversight of Citizens, yet the company has had to be bailed out by other Florida homeowners when it has come up short and has faced accusations of ethical problems.

Citizens "has gone from being the insurer of last resort to becoming the largest insurance company in the state - all under Crist's watch," the Davis campaign said.

In other insurance news, the Office of Insurance Regulation scheduled public hearings on rate-increase applications submitted by four insurers. All hearings will take place in room 401 in the Senate Office Building in Tallahassee.

Federated National's request for a 49.5 percent rate increase for homeowner policies will take place at 10 a.m. Friday. The company had 352 Manatee policies and 609 Sarasota policies as of June 30, according to the Office of Insurance Regulation.

Homewise Insurance Co.'s request for a 75.8 percent rate increase requested by Homewise Insurance Co. will take place at 1 p.m. Friday. The request pertains to wind-only homeowners policies.

Liberty American Select Insurance Co., with 1,498 Manatee homeowners policies and 1,338 Sarasota homeowners policies as of June 30, is seeking a 44.8 percent increase for these products. Its request also calls for a 96.2 percent increase in dwelling fire insurance and a 95.8 percent increase for condo unit owners insurance. The hearing is scheduled for 10 a.m. Sept. 28.

Florida Family wants a 14.8 percent increase for homeowners policies. It had 21 Manatee policyholders and 408 Sarasota policyholders as of June 30. The company also seeks a 27.7 percent increase for its dwelling fire insurance. Its hearing is set for 1 p.m. Sept. 28.

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