Missing: affordable reinsurance
More proposed rules are in the pipeline with a workshop tomorrow to implement some of Florida’s most recent property insurance market reforms, five insurance companies get the okay to takeout up to 186,000 policies from Citizens Insurance as the state-backed carrier readies a new and improved policy clearinghouse platform, the push for a better Florida reinsurance solution next year, plus a proposed national model law regulating public adjusters. It’s all in this week’s Property Insurance News.
Rulemaking: The Florida Office of Insurance Regulation (OIR) is busy this summer developing a spate of new rules. The most recent would change the application procedures for insurance companies wanting to do business in Florida and is the subject of an OIR workshop tomorrow. Rule 69O-136 also covers mergers, acquisitions, re-domestication, and changes to existing Certificates of Authority. You can view the various subsections here and the related forms here. Some apply to all authorized carriers and others to surplus lines and other specific carriers. (The August 8 workshop is at 10am in room 116 of the Larson Building or you can join by phone at 850-328-4354 and enter conference ID# 656-053-520.)
Many of OIR’s proposed rules are to implement the Insurer Accountability law (SB 7052) passed by the Florida Legislature this year. They include Rule 69O-137.014 (Temporary Discontinuance of Writing New Residential Policies), Rule 69O-138.004 and Rule 69O-138.003 (Market Conduct Examinations), and Rule 69O-171.012 (Claims-Handling Manuals). OIR issued Memorandum OIR-23-03M explaining the August 1 emergency rule on claims-handling manuals, specifically through OIR-B3-495 (Annual Certification of Claims-Handling Manuals) and OIR-B3-496 (Submission of Requested Claims-Handling Manuals). Please call our office to discuss these rule changes. For our health insurance industry readers, there are also proposed new rules, including pharmacy benefit managers, part of Florida’s Prescription Drug Reform Act. You can access the full list here.
Citizens Takeouts & Clearinghouse: OIR last week approved five private companies to takeout up to 184,000 residential policies from the state’s insurer of last resort, Citizens Property Insurance, whose policy count has grown to 1.35 million. Safepoint, Southern Oak, Florida Peninsula, Monarch National, and Slide Insurance companies will now work to make that happen by October 30. Citizens policyholders must return to the private market unless the private proposed premium to move is greater than 120% of their current Citizens’ premium.
Meanwhile, Citizens is spending almost $36 million on a better policy clearinghouse platform. The platform connects private market carriers to obtain quotes for new and renewal policies and determine eligibility for takeout. The new platform is supposed to make it easier for agents, consumers, and policyholders to find private market coverage.
© Can Stock Photo / radiantskies
Reinsurance: In my recent interviews with reporters, I’ve stressed that the Citizens depopulation approvals are a good thing for the market, as it will help reduce the potential burden on Florida taxpayers should future catastrophes deplete Citizens’ surplus and reserves (watch yesterday’s This Week in South Florida segment). I’ve also shared the last component of market reform that remains largely unaddressed: affordable reinsurance, so consumers can realize policy savings. Reinsurance broker Gallagher Re reports that mid-year renewals saw substantial rate increases ranging from 25% to 40%. That cost is passed along by insurance companies to their policyholders. The Florida Legislature in 2024 has the opportunity to try again to provide meaningful help to consumers through reinsurance savings.
Public Adjusters Model Law: The National Council of Insurance Legislators (NCOIL) at its recent summer meeting introduced the Public Adjuster Professional Standards Reform Model Act. The proposed model law would require adjusters submit template contracts to their state department of insurance for approval. It would also require a $50,000 minimum surety bond or irrevocable letter of credit for an individual to be licensed as a resident independent, staff, or public adjuster. Also discussed were proposed amendments to the NCOIL Model State Uniform Building Code. Look for more discussion on both at the NCOIL November annual meeting.
LMA Newsletter of 8-7-23
