Florida House Insurance, Business & Financial Affairs Committee Reviews Citizens Task Force Report
Feb 18, 2009
On February 17, 2009, Bruce Douglas, former Citizens Property Insurance Company(“Citizens”) Chairman of the Board, testified before the Florida House Insurance, Business & Financial Affairs Committee (“Committee”) regarding the Citizens Mission Review Task Force (“Task Force”).
To view the meeting packet, click here.
Mr. Douglas explained that the Task Force was charged with developing a Report on the statutory and operational changes needed to return Citizens to its former role as a State-created, non-competitive residual market mechanism that provides property insurance coverage to risks that are otherwise entitled, but unable, to obtain such coverage in the private insurance market. To view the Task Force’s Final Report to the Florida Legislature, click here.
Mr. Douglas gave a brief outline of Citizens’ current financial status, and then summarized the Task Force recommendations into one major point: Raise Citizens rates 10 percent per year over a three-year period.
Mr. Douglas also pointed out that Citizens relies heavily on the Florida Hurricane Catastrophe Fund (“FHCF”), and if the FHCF is unable to meet its bonding capacity, Citizens may experience difficulty paying claims.
After Mr. Douglas’ statements, the Committee Members, who asked him many questions, appeared to recognize the need to raise Citizens rates, although several Members commented that a rate increase would be difficult on policyholders in these tough economic times.
In response to questions by Representative John Wood (R-Haines City), Mr. Douglas explained that Citizens was “subsidizing” construction in coastal areas because it often was the only insurer that would write policies covering condominium construction in these areas. After extending the Committee meeting by 15 minutes, Chairman Pat Patterson adjourned the meeting with several Members still waiting to ask questions.
Additionally, the following insurance-related bills were temporarily postponed.
HB 135 – Pub. Rec./Insured Dependents/Agency Group Plan by State Representative Seth McKeel. Provides exemption from public records requirements for personal identifying information of minor dependent of current or former officer or employee of agency when a dependent is insured by agency group insurance plan; provides for retroactive application and future review and repeal of an exemption; provides for a statement of public necessity.
HB 351 – Property Insurance Rate Reduction by State Representative John Legg Creates “Property Insurance Rate Reduction Act;” requires insurance companies writing property insurance policies in state to consider county ordinances and amendments to Florida Building Code when setting property insurance rates.
To unsubscribe from this newsletter, please send an email to ccochran@cftlaw.com.