Florida Office of Insurance Regulation Considers ACA Home Insurance Rate Increase Request
Mar 2, 2010
The Florida Office of Insurance Regulation (“OIR”) held a public rate hearing today, March 2, 2010, on ACA Home Insurance Corporation’s (“ACA”) proposed homeowners rate filing, in which a 20.5 percent overall rate increase for new and renewal business in the company’s HO3 (homeowners) and HO6 (condominium) lines of business was requested. The requested increases within ACA’s filing are not uniform and some geographic areas are subject to higher rate increases.
Present at the hearing on behalf of the OIR were Deputy Commissioner Belinda Miller, Deputy Director Michael Milnes, Actuary Ken Ritzenthaler and Assistant General Counsel Rhoda Johnson.
In opening the hearing, Kevin Milkey, Executive Vice President of ACA’s parent company, ARX Holding Corporation, related that ACA has a B++ A.M. Best rating. In 2009, it had $10.5 million in premium and $15 million in surplus. Although ACA is well capitalized, according to Mr. Milkey, the company is requesting approval of the rate increase by the OIR in order to allow new business to be written.
Milliman actuary Nancy Watkins testified that ACA’s indicated rate is approximately 40 percent, which equates to nearly double the requested rate increase. She also reviewed the actuarial process for determining the rate level, noting that the filing supports actuarial principles and is reasonable based on the soundness of the related ASI Preferred Insurance Company rate.
Mr. Ritzenthaler asked a series of questions concerning the rate request, expressing concerns with the lack of actual experience data in the rating factors. Ms. Watkins noted that much of the actual experience data is unavailable to ACA and the reasons for its non-inclusion are addressed in ACA’s filing.
Mr. Ritzenthaler also asked about the use of credit scoring in the filing, to which Mr. Milkey responded that the filing includes discounts for good credit and no surcharges for poor credit.
No representatives were present from the Office of the Florida Insurance Consumer Advocate.
Following a question and answer session, Ms. Miller concluded the hearing, noting that the record will not be kept open.
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