Plus upcoming meetings of interest
Olympus Insurance Company is challenging in court a decision by the Florida Office of Insurance Regulation (OIR) denying what the company says are reasonable limitations in its repair and replacement of damaged items to meet the state’s “matching” requirement. Florida law requires insurance companies to match covered, damaged property to the adjacent undamaged property in order to return it to its previous uniform appearance.
Olympus filed a homeowners policy form with OIR in December 2020 that sought to limit its liability by providing matching coverage “if repairs or replacement are reasonable…consider(ing) the cost of repairing or replacing the undamaged portions…the degree of uniformity that can be achieved without such cost and the remaining useful life of the undamaged portion and other relevant factors.” This matching sub-limit provision capped repairs or replacement of undamaged property at 1% of Coverage A liability limits.
OIR rejected the form, saying the Olympus language was prohibited under section 626.9744 of Florida Statutes. Olympus filed a lawsuit against OIR in September 2021 refuting that interpretation. OIR sought to have the suit dismissed, arguing Olympus hadn’t exhausted its administrative remedies. Last week, Leon County Circuit Court Judge John Cooper heard from both sides in an hour-long hearing and ordered both to file proposed orders in two weeks. So we expect the judge to issue an Order in the coming months that will likely decide he either has jurisdiction to rule on the matching sub-limit policy language or alternatively, require Olympus to exhaust its administrative remedies at OIR. Stay tuned to further developments on this important industry-wide case.
Upcoming Meetings of Interest:
The Governor and Cabinet will meet tomorrow (March 29) as the Financial Services Commission to review and vote on 13 proposed insurance Rules put forth by OIR. They include the form and process to be used by OIR in its upcoming litigated claims data call, required under last year’s SB 76 insurance reform and consumer protections. As we reported, there were industry concerns expressed at an OIR workshop last month regarding the ambiguity of the data call template. If approved tomorrow, this and the other 12 proposed Rules are subject to a final hearing if someone requests it.
The Florida Insurance Guaranty Association (FIGA) will hold a public workshop via webinar on Wednesday (March 30) to explain the reporting and remittance requirements for both the 2021 and the 2022 assessments on Florida property insurance companies to cover the outstanding claims of past companies’ insolvencies. The 2021 assessment amounts to $168 million and the 2022 assessment (for St. Johns Insurance Company’s recent insolvency) amounts to $312 million (not the $190 million we reported in the last newsletter). You can register here.
The Florida Hurricane Cat Fund Advisory Council meets Wednesday (March 30). Among the agenda items is a vote on the 2022 Reimbursement Premium Formula.
The Office of Insurance Regulation (OIR) will hold a public hearing Thursday (March 31) on Citizens Property Insurance Corporation’s request for an overall 11% increase for its 2022 rates, effective August 1. The actual proposed rates being considered come in just under 11% due to issues regarding sinkhole coverage and the Cat Fund. This request is above a previous 8% increase in personal lines that Citizens staff had recommended to its Board of Governors last fall.
LMA Newsletter of 3-28-22