Friday, March 12 2021
The Florida Office of Insurance Regulation will conduct a rate hearing on Monday, March 15 on proposed rate increases from Citizens Property Insurance Corp.
The hearing will be held virtually at 9 am EST and will include testimony and public comment on the insurer’s proposed rate filings.
The Citizens Board of Governors approved 2021 rate recommendations in January that call for a statewide average increase of 7.2% for personal lines policyholders – homeowners, condominium unit owners, mobile homeowners, dwelling, and renters. Homeowner policies would increase by an average 6.1%. Condo owners would see an average 9.4% increase. Renters rates would increase 4% on average.
If approved by OIR, the 2021 rates would go into effect for policies renewed after August 1.
The approved rate recommendations came after Citizens Board deferred action on a slate of rates that called for an average 3.7% increase in personal lines coverage, including a 2.2% increase in homeowners coverage. The board directed Citizens actuarial staff to work with OIR to address the growing disparity between Citizens rates and those charged by private insurance companies in many areas of the state.
The insurer said the higher rates would make it more competitive with the private market and slow the flow of policyholders returning to Florida’s insurer of last resort. Since March 2020, Citizens’ policy count has grown from 443,444 to 551,613, an increase of 26.4%. Citizens is now receiving more than 3,000 new customers per week, the company said at its March 3 board meeting. It is preparing for 150,000 additional policyholders by the end of the year as private insurers continue to raise rates, limit coverage and exit particular markets to stem rising losses.
Citizens is required by law to recommend actuarially sound rates, while complying with a legislative glide path that caps individual rate increases at 10%, excluding coverage changes and surcharges. However, private insurers are implementing rate increases far in excess of the 10% cap, widening the premium gap between private insurer and Citizens policies.
The board also approved in January a recommendation that new policyholders pay actuarially sound rates instead of joining the insurer with capped premiums that existing Citizens policyholders receive. If approved by OIR, the recommendation would increase rates for new business by an average of 21%. A recent report commissioned by Citizens identified the need for the insurer to make changes to the Citizens’ glide path for rate increases.