Florida Office of Insurance Regulation Approves Citizens High-Risk Account Rate Increases
Nov 20, 2009
The Florida Office of Insurance Regulation approved Citizens Property Insurance Corporation (“Citizens”) High-Risk Account rate increase request on November 19, 2009.
The advisory is reprinted below. To view Florida Insurance Commissioner Kevin McCarty’s Order, click here.
Rate increases for Citizens’ Personal Lines, Mobile Homeowners Physical Damage and Commercial Lines Accounts were approved on October 29, 2009.
Should you have any questions or comments, please contact Colodny Fass.
Florida Insurance Commissioner Signs Order Establishing Citizens’ Rate Adjustments
Friday, November 20, 2009
TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty yesterday signed an order establishing rates for the Citizens Property Insurance Corp.’s (Citizens) high-risk account.
The rates were reviewed to determine whether or not they were actuarially sound under Section 627.351(6)(n)5, Florida Statutes; the law requires Citizens, beginning July 15, 2009, to make rate filings for each personal and commercial line of business to be effective no earlier than Jan. 1, 2010. These rate filings begin the “glide path” to allow Citizens eventually to achieve actuarially sound rates. This will occur over time, as Citizens’ rate adjustments are limited to a 10 percent increase for any policyholder per year.
A public rate hearing was held in Tallahassee on Nov. 10. The final rates are similar to the requested rates, although the Office did make adjustments.
“Recent legislation requires this office to establish the rates for Citizens’ policyholders, and our actuaries did that in their usual deliberative and disciplined manner,” said Commissioner McCarty. “The intent of the legislation is to annually adjust Citizens’ rates so they become actuarially sound.”
Although the Florida Legislature capped Citizens’ annual rate increases at 10 percent, one line of business shows a higher increase because the law allows companies to pass on a cash build-up factor paid to the Florida Hurricane Catastrophe Fund to policyholders, which is not subject to the 10 percent limit.
The order also included technical guidelines to be followed when the next rate filings are made in 2010, and requires Citizens to respond to concerns raised regarding Monroe County rates.
Members of the grass-roots organization, Fair Insurance Rates in Monroe, gave a presentation at the public rate hearing expressing concern that the computer model Citizens uses to calculate rates does not take into account several factors specific to Monroe County.
The following are the approved statewide average high-risk account rate increases included in the order:
- Homeowners: 5.2 percent
- Dwelling Fire: 4.0 percent
- Mobile Homeowners: 11.0 percent
- Commercial Property – Nonresidential: 9.3 percent
- Commercial Property Residential – Excluding Condo Associations: 9.4 percent
- Commercial Property Residential – Condo Associations: 9.4 percent
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