• Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • MENU

Regulators Reject Citizens Rate Cap Request

SHARE THIS

Rate requests reduced, too

Citizens Property Insurance Corporation, Florida’s insurer of last resort, lost out last week on its attempt with regulators to apply actuarially-sound rates to its new customers, while allowing existing policyholders to continue enjoying a legislatively-set 10% rate hike cap.  The company also had its proposed rate increase on multi-peril homeowners insurance cut almost in half.

During its March 15 rate hearing, Citizens asked the Florida Office of Insurance Regulation (OIR) for rate cap flexibility for new customers, saying its interpretation of the statute capping annual increases at 10% can be interpreted as only applying to existing customers.  The company also cited a November 2020 report by the FSU Florida Catastrophic Storm Risk Management Center supporting the need to reduce Citizens exposure by changing the 10% cap.  The request would have increased rates for new business by an average of 21%, Citizens testified.

OIR, in its rate Order released last week denied the request, noting it “finds the justification for this provision to be insufficient and that all policies, whether new or renewal, should be subject to the same capping under … Florida (law).”   OIR also noted that when the glidepath was initially recommended by the Citizens Property Insurance Corp. Mission Review Task Force in 2009, “there was no distinction between new and renewal rates in the final report of the task force.”

Citizens President & CEO Barry Gilway told OIR regulators that the company needed the cap to help stem the 5,000 new policies it’s been getting every week from the private market.  “The reality is the marketplace in Florida is shutting down,” Gilway said.

Citizens was seeking an overall statewide rate hike of 6.2% with the largest individual policy rate increase to be capped at 10%.  What it got was a 3.2% increase instead.  OIR also significantly lowered Citizens’ Commercial Residential Condo Mult-Peril rate request, from a 7.8% to 4.8% increase.  The chart below provides the overall estimated statewide average rate changes for all of Citizens personal lines accounts (PLA) and coastal accounts (CA).

From Florida Office of Insurance Regulation, April 20, 2021

OIR also disapproved Citizens’ request to add a risk factor provision, which Citizens said is an estimate of an extra amount the carrier should charge for the cost of catastrophic risk it is assuming.  You can read more of the backstory from our past newsletter here.

So Citizens only hope for now in gaining flexibility over the mandated 10% rate cap rests with SB 1574 by Senator Jeff Brandes which passed its last stop in the Appropriations Committee last week and is ready for consideration by the full Senate.

LMA Newsletter of 4-26-21

SHARE THIS

Tags: Barry Gilway, Citizens Property Insurance Corporation, David Altmaier, Florida Homeowners Insurance Market, Florida Office of Insurance Regulation, Florida Property Insurance

“I have followed your weekly newsletter and podcasts and now have a full appreciation for what you bring to this industry.  You are an inspiring force, plain and simple.  I wanted you to know that you make a difference.  Thank you for all you do!”

Jeffrey Karam, CPCU
Bradenton, FL

“Thank you Lisa for staying on top of, as well as advocating, for Florida residents and legislative reform. Your newsletters are very informative and enjoy reading the points of view.”  

Shawna Miller, Sr. Claims Quality Assurance & Compliance Manager
Florida Peninsula Insurance Company
Jacksonville, FL

“Just wanted to say that I thoroughly love your newsletter. It’s is always informative and insightful to the ins and outs of our industry.  You are an inspiration and an important asset in the insurance world.  Keep up the great work!” 

Cynthia Scott, President
University Insurance Group
Davie, FL

“Your newsletter is fabulous!  I greatly appreciate the topics you expose, so that insurance professionals like myself can keep up with the latest events that affect the public we serve and ourselves.”

Cynthia Hoehn, Independent Property & Casualty Personal Lines insurance agent
Clermont, FL

“Just a quick note to let you know how much I have appreciated your newsletter over the years and the assistance they offer for those in the field of claims. We depend on the information more than you will ever know!”

Laurie Rasberry, Chief Claims Officer
Acorn Claims
Prosper, Texas

“Lisa this is another great newsletter, and we appreciate the time and energy you put into these informative updates – you are on top of these topics!”

Mike Graham, CEO
Smart Vent Products, Floodproofing.com, & Risk Reduction Plus
Juno Beach, FL

“Great article on Risk Rating 2.0!”

Austin Perez, Senior Policy Representative for Federal Housing, Valuation, Insurance and Commercial Issues
National Association of Realtors
Washington, D.C.

“Another great Newsletter on Florida industry this week.  Your service and advocacy in Florida is very important to keeping me updated and apprised of the Florida insurance laws, trends and overall environment.  Something similar is very much needed in Louisiana, too.”

Jennifer Tedesco, Esq., Claims Director
Pharos Claims Services
Orlando, FL

“Lisa Miller is a true champion for the insurance industry, with her regular updates! We appreciate all you do and keeping us up to date on priority issues!”

Gillian Lloyd, Account Executive
Zywave
Milwaukee, WI

GET THE LATEST UPDATES IN YOUR INBOX FOR FREE!

SUBSCRIBE NOW

READ THE LATEST LMA NEWSLETTER ONLINE NOW

READ NOW

331 N. Monroe Street
Tallahassee, FL 32301
(850) 222-1041
[email protected]

*DBE certified through affiliate Lisa Miller Consultants

© Copyright 2008 - 2023
Lisa Miller Associates
All Rights Reserved
Managed by SiteBolts