Citizens Market Accountability Advisory Committee July 16 Meeting Recap

A meeting of the Citizens Property Insurance Corporation (“Citizens”) Market Accountability Advisory Committee (“Committee”) took place on Monday, July 16, 2007.

The agenda is attached for your reference.

The highlights of the meeting are as follows:

General Information

As of June 30, 2007, Citizens had 1,308,431 policies in force and an exposure of $457,340,962,130.

2007 Legislative Report

Senate Bill 2498 was passed by the Florida Legislature during its 2007 Regular Session, and was signed into law by Governor Charlie Crist on June 11, 2007, with the exception of a line-item veto specific to a $600,000 appropriation included in the bill.  This legislation provides for a number of changes specific to Citizens.  A summary of the bill is attached for your review.

Claims Task Force Update

During the January 2007 Special Session, the Legislature passed House Bill 1A, creating the Task Force on Citizens Property Insurance Claims Handling and Resolution (“Task Force”).  The Task Force was charged with providing a report by July 1, 2007, containing recommendations regarding the process Citizens should use to dispose of the claims that remain open from the 2004 and 2005 hurricane seasons.  The full report is enclosed herein.

Actuarial and Underwriting Update

The Actuarial and Underwriting Committee is recommending approval of the following to the Citizens Board of Governors:

Underwriting

• Submission of filings to the Office of Insurance Regulation (“OIR”) to increase Citizens agents’ binding authority limit from $500,000 to $1 million for multi-peril and homeowners policies.

Coverage

• Submission of filings that will permit policyholders to opt-out of wind and/or contents coverage.
• Submission of filings that will permit policyholders to reduce or opt-out of Coverage B.
• Submission of rate and form filings to exclude coverage for damage caused by hurricanes to awnings, carports and screen enclosures, with a limited buy-back as part of these filings.
• Amendment to the Replacement Cost Coverage Rule so that policyholders may purchase Replacement Cost as long as their Contents Limit is not less than 25% of their Coverage A limit.

Pay Plan

• Beginning July 1, 2007, Florida law began requiring that insurers offer payment plans to policyholders and accordingly, Citizens is offering full, quarterly and semi-annual payment plans to all policyholders.

Further, the Actuarial and Underwriting Committee provided the following update on the International Catastrophe Insurance Managers, LLC (“ICAT”):

• On June 1, 2007, Citizens completed its assumption of the Property and Casualty Joint Underwriting Association’s (“PCJUA”) policies, assuming a total of 1,001 policies.
• The Inland Wind-Only Program began writing new business on June 1, 2007.  The first 15 days generated $1.8 million in premium and 144 policies.
• Citizens’ contract with ICAT was signed on June 14, 2007.  The date of launch of the statewide Commercial Multi-Peril product will likely be delayed until October 2007.  The product development stage is expected to last 2-3 weeks and the filings made shortly thereafter.

Consumer Services Update

The Assistant Director of Agent and Consumer Services reported the following:

• E-mails from policyholders are responded to within 24 hours.
• A post office box has been created for the receipt of correspondence from policyholders, and such correspondence is responded to within 5 business days of receipt.
• A Customer Care Team has been created to act as an inbound call center for policyholders and as a means of improving Citizens’ departments and service.
• Citizens has improved its website and instituted a program where adjusters are required to provide policyholders with their name, identification number, address, website, phone number and instructions for disputing a proposed settlement.
 
New Business

Citizens will be providing a Hurricane Preparedness Checklist as a cut-out section in newspapers.

Future Meetings

• August 2, 2007 – Board of Governors Conference Call from 9 am-12 noon.
• September 19, 2007 – Committee Meeting.
• September 20, 2007 – Board of Governors Meeting from 9 am-12 noon in Tallahassee, Florida.

 

Should you have any comments or questions regarding this newsletter, please feel free to contact this office.