Further Changes Made to Insurer Annual Report Card Rules Subsequent to February 9 Florida Department of Financial Services Hearing

Pursuant to a February 9, 2010 Florida Department of Financial Services hearing, changes have been made to proposed Rules for an annual report card to be used by the Office of the Florida Insurance Consumer Advocate in grading authorized personal residential property  insurers.  The report card will be presented on a form and use a letter-grade scale.

Changes to the following proposed Rules are described below:

• 69M-236.002 Definitions
• 69M-236.004 Limitations and Exclusions
  • Subsection (5) of proposed Rule 69M-236.002 has been deleted. This subsection contained a definition for “qualifying premium.”
  • The words “average number” have been deleted from Subsection (7) of proposed Rule 69M-236.004 and replaced by the word “median.” The words “by all personal residential property insurers” have been added.
  • The words “qualifying premium” have been deleted from Subsections (8) and (10) of proposed Rule 69M-236.004 and replaced in subsection (8) by the words “direct written personal residential premium in this state during the experience period, excluding the latest year” and in subsection (10) by the words “direct written personal residential premium in this state.”

As changed, the proposed Rules will read:

69M-236.002 Definitions.

(1) “Complaint” means any written communication that expresses dissatisfaction with a specific personal residential property insurer subject to regulation under Florida’s insurance laws.  An oral communication which is subsequently converted to a written form meets the definition of a complaint for this purpose.

 (2) “Division” means the Division of Consumer Services of the Department of Financial Services.

(3) “Experience period” means the latest five calendar years for the purpose of evaluating complaints and the latest five calendar-accident years for the purpose of evaluating time to pay claims.

(4) “Personal residential property insurer” means an insurer that writes personal residential property insurance such as homeowner’s, mobile home owner’s, dwelling, tenant’s, condominium unit owner’s, cooperative unit owner’s and similar policies and includes an insurer that, in addition to writing personal residential property insurance policies, also writes commercial residential property insurance policies such as condominium association, cooperative association, apartment building and similar policies.

69M-236.004 Limitations and exclusions.

(7) For calendar-accident years in which a company had fewer than 50 paid claims as of the end of the latest calendar year, such claims are assumed to have been paid in the median number of months for payment by all personal residential property insurers.

 (8) Insurers with less than $30 million in direct written personal residential premium in this state during the experience period, excluding the latest year, are graded on each of the four factors but are given an overall grade of “I” for “insufficient complaint history” due to a lack of actuarial credibility. 

(10) Insurers with less than $100,000 in direct written personal residential premium in this state in the latest calendar year will not be graded.

The remainder of the Rules read as previously published.

Should you have any questions or comments, please contact Colodny Fass.

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