The Florida Office of Insurance Regulation has issued an order to the Citizens Property Insurance Corporation (Citizens) to conduct a review of its rates to assure they meet statutory guidelines. The Legislature ordered Citizens to adjust its wind-only rates on July 1. Florida law required these rates to be both actuarially sound and to not be lower than the rates of the admitted voluntary market as of that date.
The order requires Citizens to review and adjust rates for its personal lines account policies (homeowners, dwelling fire and mobile home) and for its personal residential high-risk account policies (wind-only) to also meet this statutory requirement. These revised rates must be filed with the Office by Dec. 31. Citizens commercial lines rates (condo association, apartment complex and homeowners association) have been filed and must be implemented by Jan. 1.
Florida Insurance Commissioner Kevin McCarty said his order will both “satisfy the statutory mandates passed by the Legislature and also assure the financial solvency of Citizens in the future. Citizens and its predecessor entities were integral to the rebuilding of our insurance markets after Hurricane Andrew and have been key to dealing with this year’s unprecedented string of catastrophic hurricanes.”
There are certain territories in the Tampa Bay region where Citizens is specifically being ordered to implement recently approved rates. These areas have been of great concern because this is where Citizens policy growth has been exceptionally rapid. Citizens has shown significantly worse loss experience, due to claims filed for sinkhole damage, in Citrus, Lake, Pasco and Hernando counties and has been ordered to implement new rates to reflect these increased risks by Dec. 15.
The order also requires Citizens to certify to the Office of Insurance Regulation that its rates are in compliance with Florida Statute 627.351(6)(d) twice annually and, if they are not, to revise and implement any necessary rate changes.
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