Florida’s Citizens Property Insurance Market Accountability Advisory Committee Hears Updates On Timeshare Eligibility, Binding Violation Program, Agent Roundtables

 

At its meeting on March 21, 2013, Citizens Property Insurance Corporation (“Citizens”) Market Accountability Advisory Committee (“Committee”) heard a variety of updates, including specifics on Citizens’ recent revisions to its Binding Violation and Late Submission program.  The issue of transient occupancy was also discussed.

To view the meeting materials, click here.

 

Commercial Lines Short-Term Rentals

Citizens Chief Insurance Officer Yong Gilroy gave a brief history of recent actions involving coverage for short-term rentals, noting that in February 2012 Citizens took the following actions:

• Designated timeshares in its underwriting manuals as eligible for commercial residential insurance coverage
• Required a 25 percent or less transient occupancy for commercial residential program eligibility
• Updated its commercial underwriting manuals to better clarify definition of transient occupancy.

In May 2012, the Florida Office of Insurance Regulation (“OIR”) approved the measures, effective July 1, 2012 for new business and August 1, 2012 for renewals, Mr. Gilroy noted.

During the past seven to eight months, inquiries about transient occupancy have been minimal.  The most commonly asked questions are how Citizens identifies policies for transient occupancy and when policyholders will be notified of potential non-renewal, Mr. Gilroy explained.

Since, one hundred licensed timeshares have subsequently been deemed ineligible for commercial residential coverage, he noted.  Of 1,219 policies indentified through the 2012 commercial re-underwriting program, 45 were deemed to be transient occupancy at the 25 percent or greater level and ruled ineligible for commercial residential coverage.

“The average percentage of was around 55 to 66 percent, which is well above the 25 percent threshold we established last year,” Mr. Gilroy said during his report.

 

Mandatory Electronic Document Submissions

In his report, Citizens’ Director of Personal Lines Underwriting Operations Thomas Popko related that the Mandatory Electronic Document Submission (“EDS”) process was launched in January 2013 and that Citizens’ Binding Violation and Late Submission Program (“Program”) since has been revised.

On March 6, 2013, Citizens published Agent Informational Email, IE #005-13, in which was announced a new Binding Violation Form and providing details of modifications to Binding Violations and Late submissions. Included in the changes to the Program are the following:

1. Citizens has reduced the number and types of binding violations from 16 to five.  Those five are:

• BV1 – Circumventing the EDS process
• BV2 – Submitting Ineligible risk
• BV3 – Submitting Uninsurable risk
• BV4 – Posting Premium on and Unbound Risk
• Late Submission Violation (Documents received more than 5 days after the policy effective date)

2. Revised Binding Violation Form

3. Agent appeals of binding violations should be uploaded via EDS on the policy in question, including any supporting documentation as appropriate

Disciplinary sanctions are still being developed and will be announced at a later date once they have been approved.  However, no disciplinary actions are being taken at this time, since the program is still very new.

Mr. Popko pointed out that the number of binding violations have been reduced to just 34, when the numbers used to be in the hundreds.  Late submissions, which total well over 5,600, continue to be a problem, however.

 

Agent Roundtable

In a brief presentation, Citizens’ Director of Consumer and Agent Services Steve Bitar recapped that the Agent Roundtable program was created in January 2008.  Composed of 13 members who represent various agencies and companies, the Roundtable focuses on topical concerns of interest to the insurance industry.

Mr. Bitar said the Agency Roundtable is working with Citizens’ staff to develop standards for agent performance management.

 

2013 Catastrophe Update

Citizens’ Assistant Director of Field and Catastrophe Operations Jimmy Johnson briefly summarized the catastrophe preparedness exercises his department has undertaken.  Those include:  a catastrophe simulation involving deployment of 160 independent adjusters, an orientation session, deployment and setup of satellite equipment, establishment of a call center, and complaint testing.

Mr. Johnson said Citizens’ 2013 Catastrophe Enterprise Plan will be finalized in May.

 

CORE System

Kelly Booten, Citizens’ Vice President of Enterprise Planning and Project Portfolio Management, explained that CORE-Citizens’ “next generation” insurance operating system, is ramping up in stages and will ultimately provide greater efficiency and accuracy in processing of claims due to automation.

For agents, this is expected to result in:

• Online management of their respective policies and pending actions and decisions
• E-communication ability with underwriters for updates and action items
• Access to real-time data to promote better self-service for themselves and policyholders, and reduce the need for paper
• Ability to input first notices of loss for commercial lines business
• A unified desktop view of claim, billing and policy information
• Automated desktop underwriting to validate risks acceptance and required documents

With no other business before the Committee, the meeting was adjourned.

 

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