While Citizens says reform is working
Property reinsurance prices remain high with hurricane season rapidly approaching, Citizens Insurance reports encouraging market reform outcomes, a public adjuster faces a two-year suspension, plus a proposed change to the Emergency Adjuster licensing rule. It’s all in this week’s Property Insurance News.
© Can Stock Photo / radiantskies
Reinsurance: AM Best reports that property reinsurance prices nationally remain firm and anticipates they will harden or go higher through this year. That’s bad news for Florida’s domestic property insurance companies, many of whom report continued difficulty finding available and affordable reinsurance. While the December 2022 special session established a second hurricane reinsurance fund (The Florida Optional Reinsurance Assistance Program) of $1 billion for carriers on top of the Reinsurance to Assist Policyholders Program (RAP) created in the May 2022 special session, there is a gross lapse of capacity and affordability in the private reinsurance market. Without proper reinsurance, our homeowners insurance companies won’t be able to meet their financial requirements with state regulators and are putting their ratings at risk. As go ratings, so go insolvencies.
Florida is not alone. AM Best reports the P&C sector in the US saw its 2022 reported combined ratio decline from the year before, from 100 to 104, with anything over 100 generally seen as unprofitable results. So our companies are competing with the rest of the nation’s for a diminished supply of reinsurance. It’s putting someone else’s dollar at risk for your benefit. And it’s been a loss for reinsurance firms over the last few years. Ask yourself: Would you be willing to put your dollars in to help someone else’s property?
Reforms Starting to Help: State-backed Citizens Property Insurance reports that one of the 2021 Insurance Consumer Protections (SB-76) is starting to help. Citizens staff reports that the legislative requirement that a plaintiff file a Notices of Intent to Litigate (NOITL) and demand at least 10 days before filing a lawsuit is making a difference, with a lot of potential lawsuits from Hurricane Ian claims instead being resolved through negotiation or appraisal. While Citizens has received a few dozen lawsuits from Hurricane Ian through January, there is much anticipation that that number will grow. New lawsuits in 2022 rose 17% from the year prior, attributed to increased policy count, which is now 1.2 million. However, so far in 2023, the number of new suits is down from the same time last year, with the NOITL law changes again being credited for the decrease. There’ve been fewer Assignment of Benefits (AOB) cases as well.
Adjuster Faces Suspension: An administrative law judge is recommending a 24-month suspension and a $5,000 fine for a public adjuster, rather than permanently revoking his license, as the Florida Department of Financial Services (DFS) had sought. DFS said Scott David Thomas, an all-lines adjuster and president of Indemnity Public Adjusters of Weston, had engaged in a pattern of harassing and stonewalling insurance company adjusters, including blocking access to properties. Thomas has appealed the recommended order.
Emergency Adjuster Rule: DFS is proposing a change to the Rule governing Emergency Adjusters in Florida. Currently insurance companies, resident adjusters, and licensed agents can so designate and certify to DFS who should be deemed an Emergency Adjuster. The proposed change would update the definition to include those certified by an authorized insurance company, surplus lines carrier, or licensed independent adjusting firm. The amended rule also updates the Emergency Adjuster License Initial and Extension Application which would be submitted electronically via a DFS MyProfile account.
LMA Newsletter of 3-13-23
