Lawmakers and the public criticized Citizens Property Insurance Corporation’s proposed rate increases during a public hearing, highlighting the disproportionate impact on Monroe County residents who lack alternative insurance options.
Lawmakers and members of the public voiced concerns about the proposed rate increases by Citizens Property Insurance Corporation during a public hearing held on Thursday as the Florida Office of Insurance Regulation (OIR) hosted the hearing to review and gather feedback on Citizens’ rate filings.
State Senator Ana Maria Rodriguez and Representative James Mooney, both representing Monroe County, submitted letters to the OIR urging the rejection of these rate increases, highlighting the disproportionate impact on their constituents and the lack of viable alternatives to Citizens. Rodriguez noted that Monroe County residents have no choice but to rely on Citizens due to the absence of other options.
In Monroe County, where private insurance options are limited, wind-only policies are expected to rise by 16 percent, while condominium owners could face increases exceeding 20 percent. Local officials and residents argue that the county is being unfairly targeted despite its historical profitability for Citizens.
“Under Citizens’ proposed increase, Monroe County will be experiencing the second highest rate increase for all personal lines, surpassed only by Glades County,” Rodriguez wrote. “Homeowners are not choosing Citizens for its lower rates compared to other insurers. Instead, they have no viable alternative.”
Public testimonies also brought criticism of the proposed increases. James Tynan, president of a condominium association in Ponte Vedra Beach, said the association, despite implementing wind mitigation measures, would still face a 14 percent increase.
“You’ve got to walk in the shoes of all the people who are within one to three miles of the beach. That’s number one. If you’re older than 25 years as a condominium, you also fall into the thing where nobody will cover you anymore, other than Citizens,” Tynan stated. “My homeowners are now paying between $1,800 to $2,500 a year just to cover their unit. Our insurance now is 30 percent of our yearly expenses.”
Mel Montagny, president of Fair Insurance Rates in Monroe (FIRM), brought attention to Monroe County’s consistent profitability for Citizens, pointing out that from 2003 to 2021, Monroe County generated approximately $1.3 billion in premiums with total losses at around $500 million.
Montagny argued that despite this, Monroe County continually faces some of the highest rate increases, driven largely by catastrophe models that he and others believe do not accurately reflect the county’s risk profile.
“We believe that a large part of the issue as to why we continue to see rate increases in Monroe County is due to the catastrophe models,” Montagny said. “Citizens may charge up to 50% more than their established rate for non-primary residences. This allows citizens to raise rates for these policies to reach actuarially sound levels more quickly.”
The impact of recent legislative reforms, such as the removal of Assignment of Benefits (AOB) and one-way attorney fees, was also discussed. Citizens’ representatives, including CEO Tim Cerio, explained that these changes have been factored into their rate calculations and are expected to reduce litigation rates and improve overall actuarial soundness. However, some stakeholders questioned the effectiveness of these reforms in achieving long-term rate stability and affordability.
Brian Donovan, an actuary for Citizens, detailed the methodology behind the rate filings, including adjustments for competitive analysis and recent legislative changes. Donovan acknowledged the challenge of setting rates that are both actuarially sound and non-competitive, particularly in areas like Monroe County where private market options are scarce.
“Our recommendation is to not provide any rate decreases for two reasons. One, in the aggregate, we still are not actuarially sound until we get to that point,” Donovan explained. “Secondly, the growth isn’t going to help stop growth, it’s going to have the opposite effect.”
Opponents of the increases also raised concerns about Citizens’ recent reinsurance purchases, which some argued were excessively costly and suggested that Citizens explore alternative risk management strategies to reduce expenses and mitigate the need for steep rate hikes. Advocates for improved hurricane models also spoke, calling for better data collection and more accurate risk assessments incorporating actual past storm data and assigning confidence factors to models to enhance their reliability, which, they argued, would support fairer and more sustainable insurance pricing.
Last month, the Citizens Property Insurance Board of Governors outlined an average rate increase of 13.5 percent for 2025 in order to maintain financial stability and adhere to legislative requirements.
The requested rate hike spans various policy types. Personal multiparallel policies will see an average uncapped rate indication of 23.1 percent, with a non-competitive indication of 92.8 percent. This means that in order to be actuarially sound, the rate would need to increase by 23.1 percent, but to be non-competitive as required by law, the increase would need to be 92.8 percent. Personal lines wind-only policies will have an actuarially sound rate increase of 73.2 percent, capped at 15 percent due to legislative limits.
The proposed increase exceeds the 14 percent glide path limit for non-primary homes because these homes are not subject to the same caps as primary residences. The Office of Insurance Regulation will have the final say on these proposed increases, ensuring compliance with regulatory standards.
The board contended that challenges posed by maintaining artificially low rates can hinder the transition of policyholders back to the private market. Artificially low rates, the Governors said, make Citizens more competitive than intended, disrupting its role as the insurer of last resort. Adjusting rates to reflect actual risk and market conditions is “essential for long-term stability and reducing Citizens’ market share.”
Cerio expressed chagrin towards the rate hikes, but deemed them necessary for actuarial sustainability.
“Nobody is thrilled to propose a rate increase,” he said during the Board of Governors meeting in July. “But I think by having rates that are artificially low, it hampers us as the business cycle returns to a normal course. As the market recovers, it hampers our ability to shrink back down.”
Cerio claimed that while Citizens enjoys certain advantages as a government entity, such as tax exemptions and less reliance on reinsurance, these benefits need to be balanced against the need to avoid unfair competition with private insurers.