Plus, a billion-dollar return to Florida auto policyholder
Florida insurance regulators are changing the way they look at property insurance claims complaints, USAA Insurance will be returning almost $1 billion to its Florida policyholders, Citizens Property Insurance is managing to depopulate policies during hurricane season, plus how last week’s earthquake in the Gulf literally shook a Tallahassee insurance executive. It’s all in this week’s Property Insurance News.
Claims Complaints: The Florida Office of Insurance Regulation (OIR) received approval by the Financial Services Commission for its amended Rule 69O-138.003 that defines what “a disproportionate number of claims-handing complaints” is under state law. It’s 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. Excluded from the count are requests for alternative dispute resolution and complaints filed by anyone other than a named insured or named beneficiary. One or more of the following will constitute a disproportionate number of complaints:
- Sustained Elevation Criteria: A complaint index of 1.50 or higher in three of the last four quarters and 15 or more complaints in at least two of those quarters.
- Statistical Outlier Criteria: A rolling four-quarter complaint index of 2 or more standard deviations above the statewide mean for the line of business, with at least 40 complaints over that same period.
- Adverse Trend Plus Elevation Criteria: A complaint index showing a three consecutive quarter increasing trend and the most recent quarter is an index of at least 2 and with at least 25 complaints in that quarter.
- Post-Catastrophe Condition: Following a hurricane or tropical storm, the carrier meets the top 20% claims-handling complaint-to-claims ratio condition described in s. 624.3161(7)(b)1., F.S., “which independently constitutes a disproportionate level for purposes of this rule.”
The rule has no specified penalty. OIR is not contemplating a hearing workshop on the matter. We urge our insurance industry readers to be diligent on their number of complaints, given this new rule and stand ready to help you examine your particular situation.
USAA Returns Money: USAA recently announced it’s reached a nearly $1 billion return of monies to its Florida automobile policyholders. It is planning on distributing a $500 million dividend among 830,000 Florida members who had policies between 2023 and 2025, with the average payment of about $760. That’s on top of the $160 million dividend issued last December. The carrier is also lowering its Florida auto rates an average of 14%, worth another $250 million. It’s part of a trend in Florida, where the top five auto writers have lowered rates an average of 8%. USAA President & CEO Juan Andrade, in a CNBC television interview said “This is really all about tort reform in the state of Florida,” referencing the legislature’s 2022 and 2023 consumer insurance and litigation reforms, and put into an even broader perspective by APCIA President & CEO David Sampson in his LinkedIn post afterward. USAA’s move follows similar returns of past premium dollars earlier this year by Progressive and State Farm under Florida’s excess profits law.
Citizens Ongoing Depopulation: Despite hurricane season, state-created Citizens Property Insurance has personal lines policy “takeouts” scheduled for every remaining month this year, except July, with “strong participation from the private market” and an overall policy assumption rate of 77%. That’s part of the news from last week’s Citizens Market Accountability Advisory Committee. Committee Chairman Dave Newell noted “in the years we’ve been on this committee, we’ve never seen that (depopulation activity) by carriers well into hurricane season.” Nearly 76% of takeout offers to consumers fall within the 20% of Citizens’ premium, making those consumers ineligible to remain with Citizens. You can read more in our full LMA report here.
Tim Cerio, President & CEO, Citizens Property Insurance
Shaken & Stirred: That earthquake last Monday (June 8) off Cuba was felt across South Florida, as well as here in Tallahassee. Citizens Property Insurance President & CEO Tim Cerio, in the above committee meeting, said “We absolutely felt it. We had to walk out of our building because we’re having some foundation work done. I was sitting in my office. I have this six-foot coat hanger, and I was watching it sway back and forth, and everybody came out of their offices. It was fairly unbelievable.” Citizens, as of last Thursday morning, had received no insurance claims for earthquake damage and we are not aware of any filed claims with other insurance companies. The 6.1 magnitude quake was the largest in the region in more than 100 years.
LMA Newsletter of 6-15-26
