FPCA Homeowners Division: FPCA Meets With Newly Appointed Citizens Board Member John Rollins
Oct 21, 2011
PRIVILEGED AND CONFIDENTIAL ATTORNEY/CLIENT COMMUNICATION
Florida Property and Casualty Association (“FPCA”) Members Jim Graganella and Tom Jerger met with newly appointed Citizens Property Insurance Corporation (“Citizens”) Board member John Rollins on Tuesday, October 18, 2011. The purpose of the meeting was to convey the FPCA’s ideas relating to Citizens Property Insurance Corporation (“Citizens”) depopulation. Mr. Rollins was receptive to these ideas and seems willing to work with our organization.
Mr. Rollins advised that Citizens has installed a new Board of Governors, with which FPCA members could have the opportunity to provide their input. While many of the Citizens Board members have insurance experience, they are new to Citizens, itself.
Mr. Rollins explained that he feels his previous experience as a member of Citizens’ staff will be an asset to the Board, and he would like to take on the role of Board point person for depopulation. Mr. Graganella and Mr. Jerger were able to explain to Mr. Rollins from an insurer’s point of view how depopulation works in practice.
Mr. Graganella and Mr. Jerger outlined their thoughts on what Citizens’ Board can accomplish without legislative action being required, such as waiving the ceding commission and paying a bonus. Mr. Graganella also referred to a Florida Supreme Court holding that bonuses can be booked as surplus, rather than income. There was discussion of paying a policy-specific bonus, like a reinsurance offset load. Mr. Rollins seemed very receptive to these ideas.
Mr. Graganella and Mr. Jerger also discussed with Mr. Rollins how insurance companies accomplish takeouts. This was helpful for Mr. Rollins to understand how long it takes insurers to actually effectuate a depopulation plan. The group also talked about how Florida needs companies with a proven track record that are committed to the market. They also discussed the role of the Florida Office of Insurance Regulation in takeouts and oversight of takeout companies. Mr. Rollins talked about establishing a stress test for takeout companies.
The issue of the role of agents and their relation to Florida’s insurance Consumer Choice statute and its effect on takeouts arose. Since changing the law would require legislative action, the focus of the discussion was agent commissions. Mr. Rollins suggested talking with the agent members of the Citizens Board.
The rating structure for takeouts was also discussed. Mr. Rollins said that he thought that requiring a company to keep policies at the Citizens rate for three years is onerous and that this practice should be stopped. Also, he agreed that companies should be allowed to tag polices and take them out at the renewal rate.
Should you have any questions or comments, please contact Katie Webb (kwebb@cftlaw.com) at Colodny Fass.
