Two more property insurance agencies deemed insolvent in recent weeks; total up to seven since 2014

by | Mar 30, 2022


 

The number of Florida property insurance firms in liquidation is up to seven since 2014, according to the office of state Chief Financial Officer Jimmy Patronis. St. Johns Insurance and Avatar Property and Casualty Insurance have been deemed insolvent in recent weeks, rounding out the list of agencies. Property insurance has been a pressing issue for Floridians as of late, with rising costs and high rates of dropped coverage leading to an influx of enrollees to the state-backed Citizens Insurance.

The seven agencies — American Capital Assurance Corporation, Avatar Property and Casualty Insurance Company, Florida Specialty Insurance Company, Gulfstream Property and Casualty Insurance Company, Sawgrass Mutual Insurance Company, St. Johns Insurance Company, and Sunshine State Insurance Company — were deemed insolvent and entered liquidation, resulting in a vacuum for Floridians as they scramble to acquire new coverage.

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.

During the most recent Legislative Session, property insurance reform was considered to be a leading issue needing resolution by some politicians, such as Sen. Jeff Brandes.

“This is an all-hands-on-deck situation. We are not far off from homeowners paying more for insurance premiums than the mortgage,” said Brandes. “Florida’s property insurance rates are going up 30% a year, how much money does the state spend on research property insurance…zero.”

 

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.”

Last week, Citizens President and CEO Barry 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 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.

2 Comments

  1. Anonymous

    Dear Ms Delisa, your title of ” Insurance Agencies” is incorrect, these are licensed insurance companies, not insurance agencies. Just to clarify. Companies issue insurance policies, Agencies sell their policies.

    Reply
  2. Tony

    Brokers and agents are at the mercy of actuarial forecasts and rising claim costs, both real and inflated by avarice on the part of policyholders, adjusters, contractors and policy providers.

    Reply

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