Tuesday, May 1, 2012

Hurricane Watch: State-backed Florida Citizens Property Insurance Corporation Aims to Dump 678,000 Policyholders by 2014

What the heck do they know?
First it was "Excellent Timing: State of Florida Unloads $3/4 Billion of Hurricane Risk". and now this.
From the Miami Herald:
Citizens seeks fewer customers, higher premiums
As Citizens Property Insurance tries to eliminate more than 675,000 policyholders from its rolls by 2014, the state-run insurer is dropping coverage and raising rates at an alarming pace.

Citizens Property Insurance has some new ambitious goals: Move as many as 678,000 policyholders out of state-run insurance and once again become the “insurer of last resort.”

Its strategy: Enact a flurry of policy changes that will undoubtedly raise premiums and reduce coverage for thousands.

Citizens, which unveiled the aggressive “depopulation” plan this month in a revised budget proposal, says it is doing so to prevent statewide financial havoc in the wake of a major hurricane.

“Citizens has the ability to levy assessments (hurricane taxes) on almost all Florida policyholders in the event of a deficit after a storm,” spokeswoman Christine Ashburn said in an email. “The long term goal will continue to be returning policies to the private market, which is ultimately how we can reduce the reliance on assessments.”
But some homeowners have already been impacted by the first wave of Citizens’ campaign to drastically reduce its size and shore up its finances.

Patricia Temple, of Coral Gables, is bracing for a $2,150 premium increase this year, after Citizens sent an inspector to her home and decided her payments were too low....MORE 
As a non-Floridian I am curious whether they are counting on the U.S. Treasury as a backstop.

Read more here: http://www.miamiherald.com/2012/04/30/2776072/citizens-seeks-fewer-customers.html#storylink=cpy
Some further insight from Claims Journal:
Citizens Board Postpones Bid to Increase Rates
The governing board for the state-backed Citizens Property Insurance Corp. at least temporarily backed off a proposal Thursday to begin charging rates for new business next year at rates higher than allowed by law.

Although existing Citizens policyholders are protected from large premium increases by a 10 percent statutory cap, the insurer wanted to test what one member described Thursday as an ambiguity in the law to pursue higher rates on customers who contract with the company after Jan. 1, 2013.

Chief Financial Officer Jeff Atwater and state Sen. Mike Fasano, R-New Port Richey, were among those cautioning the board Thursday against going ahead with such an increase.

“The removal of the cap for new business is beyond the scope of legislative intent,” Atwater wrote in a terse three-paragraph note to Citizens’ Board Chairman Carlos Lacasa of Miami. “I would urge the board to carefully consider the policy implications.”...MORE

Read more here: http://www.miamiherald.com/2012/04/30/2776072/citizens-seeks-fewer-customers.html#storylink=cpy