Plus, the NAIC’s new homeowners insurance report
Florida insurance regulators hear concerns on their plan to consolidate three existing claims mediation programs into one, while providing clarity on another proposal about how many are too many consumer complaints, plus the first-of-its-kind national analysis of homeowners insurance market trends. It’s all in this week’s Property Insurance News.
Claims Mediation: The Florida Department of Financial Services (DFS) Division of Consumer Services held a workshop hearing earlier this month on proposed changes to Rule 69J-166.031 that would merge three mediation rules covering personal residential, commercial residential, and automobile claims into one rule. Key concerns expressed at the hearing by insurance industry representatives included the need for clarity on the scope of mediation, operational flexibility during catastrophes, and preservation of confidentiality and privileges. Specific concerns were raised about the 30-minute attendance provision, the requirement to bring the entire claims file to a mediation, and the need for clear timeframes for mediation and pre-mediation statements. Part of the merger includes standardized time-frames and processes, some of which don’t currently exist for one or more of the current rules – also raising concerns among the industry. You can read more in our full LMA Report.
Claims Complaints: The Florida Office of Insurance Regulation (OIR) has made a change based on industry feedback at its July 23 public hearing to its Rule 69O-138.003. OIR had amended the rule to define what “a disproportionate number of claims-handing complaints” is under a 2023 revamped state law (section 624.3161), and will use it to determine whether to conduct a market conduct exam on an insurance company for that purpose. The definition would be based on the Complaint Index, which is the proportion of those complaints to the carrier’s number of open claims, using the latest Catastrophe Reporting Form. At the hearing, many asked for a better definition of exactly what counts as a complaint for purposes of the Complaint Index calculation. OIR has responded with this amended Rule, changing the proposed methodology to mirror a rule that was developed for creating the complaint index or ratio for OIR’s annual report. Further changes may be forthcoming.
Excess Rates Final Ruling: OIR has finalized Rule 69O-137.008 governing filing procedures for individually-rated risks and excess rates. It now requires a report to be filed every quarter even if the insurance company has no individually-rated risks or excess risks. The previous rule didn’t require any filing until after the fourth quarter of the year if the company had no individually-rated risks or excess risks.
Homeowners Insurance Report: The National Association of Insurance Commissioners (NAIC) has released its first-ever report, Examining Homeowner Property Insurance Market Dynamics: An Assessment of Countrywide State-Level Data From 2018 to 2024. It’s a comprehensive view of the nation’s homeowners insurance market and establishes a baseline for future analysis as state insurance regulators continue to address affordability, availability, and market conditions. Among the key findings:
- Average premium per policy increased across every NAIC region since 2018, with inflation-adjusted increases ranging from 18.3% to 43.3%, with effective average premium increases of 2.4% to 5.3% per year.
- During the same period, company-initiated non-renewal rates increased between 96% and 216%, depending on region.
- Claim frequency and severity also generally increased, particularly between 2021 and 2024.
However, by its nature, the NAIC reports on conditions two years after the fact. As I told a reporter for a story to be published this week in Law.com, studying the problems of the past as it relates to Florida, with clear evidence that things have made a complete 180-degree turnaround thanks to the legislative reforms of 2022 and 2023, seems a bit meaningless and misleading. We look forward to the NAIC’s next edition of this report!
LMA Newsletter of 8-17-26
