The Florida Office of Insurance Regulation is discussing with the Financial Services Commission (Cabinet) the possibility of activating the Standby Commercial Joint Underwriting Association. According to the Florida Surplus Lines Association, regulators are responding to increasing complaints from business owners not located in Citizens Property Insurance Corp.’s possessive High Risk Account.
Business owners are complaining that their private market hurricane coverage is being non-renewed and they either cannot find private replacement coverage or the surplus lines coverage is unaffordable.
Under Florida Statute 627.3515, the Financial Services Commission could activate the Standby JUA. It is possible that Citizens could manage the program and even offer temporary office space.
Citizens can provide commercial-commercial coverage only in its High Risk Account and the coverage is limited to hurricanes. There are 39,000 commercial-commercial policies in the account.
Paul Palumbo, Citizens head actuary, recently told Florida Association of Insurance Agents members, during the FAIA conference in Orlando, that Citizens formerly received 20 commercial lines applications per week, but at the time of the conference it was receiving an average of 250 new applications per week.
Citizens cannot write regular commercial policies outside the HRA and it cannot write full commercial coverage under any circumstances, according to FSL. There are no all perils commercial accounts in Citizens operating statewide, as there are for personal lines, the Citizens’ Personal Lines Account.
The Commercial Joint Underwriting Association would be a separate organization, even if assisted by Citizens on a transitional basis. It would have its own board. Citizen’s officials are interested in exploring the possibility of eventually transferring its 39,000 commercial-commercial wind risk policies to the new entity.
Source: Florida Surplus Lines Association
Was this article valuable?
Here are more articles you may enjoy.