Insurance regulators deliberated a request made by state-backed insurance writer Citizens Property Insurance Corp. to raise rates by nearly 11 percent. The request comes as the number of policies continues to proliferate due to a growing number of insurance agencies are entering liquidation or refusing to write new policies.
The Florida Office of Insurance Regulation held a three-hour hearing on the request, which, if approved, would begin taking effect on Aug. 1. It was not immediately clear when regulators will make a decision on the proposed hikes, according to News Service of Florida.
Brian Donovan, Chief Actuary for Citizens, stated the statewide policy premium, on average, would increase from $3,044 to $3,371. A discrepancy between pricing in various parts of the state exists, however, with areas of Southeast Florida necessitating a much higher cost than a less metropolitan area.
The insolvency of St. Johns Insurance in particular was a big blow to Florida’s increasingly volatile insurance market. In early February, St. John’s became the 6th carrier this year that pulled out of Florida, citing an unstable market and heightened levels of risk due to worsening storm seasons and aging infrastructure. St. John’s held over 160,000 policies, according to the Florida Association of Public Insurance Adjusters. Slide, an insurance company based in Tampa, agreed to take on most of the St. Johns policies in Florida, though coverage costs are expected to jump.
Part of the fallout from the problems is that thousands of homeowners a week are turning to Citizens for coverage.
Last week, Gilway projected his company could have more than 1 million policies by the end of this year, as it adds roughly 5,500 policies a week. As of last week, Citizens had 801,341 policies, up from 570,000 a year ago. Senate President Wilton Simpson told reporters on March 11 that the Senate had a “pretty good bill” on property insurance and that there is a chance lawmakers would be called back to Tallahassee as “we have many companies going out of business.” But those comments followed Simpson saying the property insurance changes made during the 2021 session need time to take hold, according to Law.com.
Gov. Ron DeSantis committed to tackling the insurance monster looming down on residents and lawmakers alike, albeit later this year. DeSantis called for a special session on Tuesday to settle redistricting disputes, but when asked if property insurance would be discussed when politicians return to Tallahassee in mid-April, DeSantis emphasized that drawing maps is the priority.
However, DeSantis said that a special session for property insurance is in the cards, and will be held no later than the midterm elections in November.
“There is going to be a need to do more legislative reforms. and we were very clear about that during the (2022) session,” DeSantis said during a state Cabinet meeting Tuesday. “You know, we may have another bite of the apple very, very shortly. But we need to just understand that there is going to be a need for the Legislature to do more. [We] will not wait until the actual session in 2023. It will be done this year.”