Information from the Office of Insurance Regulation re Commissioner Provides Relief to Monroe County 05/01/06

Jan 10, 2007

Please see the below information from the Florida Office of Insurance Regulation.

Should you have any questions or concerns, please do not hesitate to contact Colodny Fass.

 

Florida Insurance Commissioner Provides Relief to Monroe County

Tallahassee–Today the Office of Insurance Regulation disapproved rates contained within a pending Citizen’s Rate Filing that is based on the highest average rate of the top 20 insurance companies as those rates apply to the high risk account (HRA) for Monroe County. Monroe County is the only county subject to a pilot program implemented by legislation last year. Under that pilot program, the Citizens rates may not be determined by adopting the highest average rate of the top 20 insurance companies if the Office finds that the top 20 insurance companies are not competing there. Instead, the rates have to be actuarially justified.

Insurance Commissioner Kevin McCarty ordered Citizens to submit a separate actuarial rate filing for Monroe County and directed Citizens to revert to the approved rates from the previous Top 20 HRA Rate Filing (2005). Commissioner McCarty also ordered Citizens to refund or credit the difference between the currently implemented rates and the 2005 rates. The Order requires Citizens to submit the filing within 60 days.

Under the current law, Citizens implemented the rates contained within the pending Top 20 HRA Filing. The effective date for both new and renewal business was March 1, 2006. Citizens has approximately 22,000 policies in force in Monroe County, however not all of those policyholders have received a premium notice reflecting the proposed increase. The average overall increase for Monroe County was 10.8%.

In March 2006, the Office submitted a report to the Legislature finding that the personal lines residential market is not competitive in Monroe County, thus establishing the legislatively mandated condition necessary to require Citizens to implement only actuarial rates in the county.

According to the Order, once Citizens makes the new filing based on actuarially sound rates for Monroe County, the Office will conduct a public hearing in Monroe County to receive testimony and public input from Citizens, consumers, the Consumer Advocate and interested third parties prior to making a decision on the filing.

The Commissioner’s Order also requires Citizens to conduct an audit of the personal lines policies in Monroe County to confirm that the premiums being charged are consistent with filed and approved rates. Citizens is required to: a) apply policy information to a replacement cost estimator program to confirm that the home is insured for the correct value, b) confirm that premiums charged are based upon the estimated replacement costs of the structure and have been accurately calculated and c) confirm that hurricane mitigation credits for home improvements have been fully and accurately applied. A detailed report of this audit will be due to the Office within 90 days.

Over the past month, Commissioner McCarty met with officials from Monroe County, the consumer group Fair Insurance Rates in Monroe County (FIRM), and other interested parties that have provided the Office with valuable information.