The Home Insurance Guru

The Florida Panhandle and the Alabama Gulf Coast are dealing with severe flooding from torrential rains as a storm system continues to batter the Southeast.

Florida Gov. Rick Scott declared a state of emergency for 26 counties to support emergency response operations for communities experiencing heavy rains.

Please read the full article below and please call L & S Insurance at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial & Life & Financial products as well.

http://www.insurancejournal.com/news/southeast/2014/04/30/327902.htm

Florida’s largest property insurer is preparing to transfer $3.1 billion in risk through a combination of reinsurance catastrophe bonds, including a $1.5 billion deal that is the largest of its kind on record.

The Citizens Property Insurance Corp. board of governors last week approved the plan that officials say will protect taxpayers from paying large assessments in the event of a hurricane.

In the 2014 storm season, if Citizens suffers the effects of a one-in-100 year storm, policyholders would face assessments totaling $2.4 billion. In the event of up to a one-in-70 year storm, Citizens would have enough funds to pay all claims without needing assessments.

That represents a significant decrease from the $11.9 billion assessment burden calculated in 2012.

The insurer is benefiting from a reduction in reinsurance costs and a growing interest by investors in catastrophic bonds.

“We’ve been able to capitalize on favorable market conditions across the board to maximize our 2014 risk transfer program,” said Chief Financial Officer Jennifer Montero. “Such market conditions have allowed us to exceed our initial expectations in regard to the level of reinsurance coverage at the most efficient pricing.”

Citizens is planning to transfer $1.5 billion in risk through the Bermuda-based Everglades Re Ltd., a company set up to solely serve as a conduit to issue Citizens bonds. The $1.5 billion comes on top of the $250 billion in bonds issued in 2013.

Unlike the 2013 catastrophic bond deal, the 2014 deal will be on an aggregate basis over the next three years, providing Citizens with coverage in the event of multiple smaller storms.

Please call L & S Insurance at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial, and Life & Financial products as well.

please enjoy the full article below.

http://www.insurancejournal.com/news/southeast/2014/04/28/327548.htm

CLAIMS BILL OF RIGHTS AND ASSIGNMENT OF BENEFITS CONTINUES TO MOVE This legislation, HB 743 by Representative Hood, and SB 708 by Bean require insurers to provide a “claims bill of rights” to consumers that file homeowners’ claims.  We have worked extensively to make the notices track existing law provisions throughout the insurance code, and inserted language clarifying that this notice does not create new law or a new cause of action in the courts.  The bill contains numerous requirements for contractors accepting an assignment of benefits.  The goal of getting the AOB language out of the bill has been realized, as passage of weak AOB requirements could weaken progress insurers may make in the courts by codifying clearly that AOB’s are permissible. The bill is moving, and was adopted by the full Senate this past week, and will likely be adopted by the House this week. FLOOD INSURANCESB 542 by Brandes, and HB 879 by Hooper create private incentives for insurers to write Flood insurance in Florida.  The House offered a strike all to the bill and enacted it after significant debate on Friday afternoon.  It will be heard again by the House on third reading today and sent back to the Senate, where I anticipate it should be adopted and sent to the Governor, although anything could happen. The bill contains language de-regulating rates for private flood insurance for the next few years, which can be offered in a stand-alone policy, or as a coverage or endorsement to a homeowner’s policy.  Insurers would also have the option of filing their rates for approval.  The legislation allows insurers limited flexibility to design their forms and coverage’s.  The House bill allows insurers to write only four types of flood insurance, standard, preferred, custom and supplemental.  The standard policy will track coverage’s under the existing Federal flood program, and uses the current definition.  Under the house bill, the preferred plan provides additional coverage by expanding the definition of “flood”, adding additional living expenses, and mandating replacement cost for personal property, instead of ACV.  The expanded definition of Flood includes water intrusion originating outside a structure that are not considered a flood loss under a standard flood policy issued by the NFIP.  “Custom policies” must include the standard coverage at a minimum, but allow insurers to be creative.  “Supplemental policies” authorizes a wrap policy product that is sold in conjunction with someone that has existing flood coverage from the NFIP or a voluntary insurer. Agents must notify consumers being removed from the NFIP that if the consumer later wants to re-enter the NFIP, a full risk rate for flood insurance may by charged by NFIP.  Both bills encourage surplus lines insurers to offer flood by eliminating the three declinations from other insurers when placing flood coverage, but the house bill only allows that if the rate is at least 10 percent less  that the flood premiums charged by an admitted Florida insurer. Insurers must notify the OIR 30 days before they begin to write flood insurance, and file a plan of operation and financial pro forma with the OIR. At this point, the House is strongly against allowing policyholders to only purchase enough coverage to cover their mortgage, and passed SB 542 on Friday on special order without this “mortgage only” language. Interestingly, the OIR believes that the bill may have de-regulated form filings, but the requirement to file a plan with the OIR will likely be used to require form filing and approval.   This will be an interesting issue if adopted in its current form.
CITIZENS’ SINKHOLE REPAIR LEGISLATION STALLEDHB 129 passed the full House. This bill makes changes to how Citizens Property Insurance Corporation (“Citizens”) insures and pays claims for sinkholes.  The bill requires Citizens to offer deductible amounts of 2%, 5% and 10% of the policy dwelling limits for sinkhole loss coverage.  Current law allows property insurers including Citizens to offer sinkhole deductibles in the above amounts, including a 1% deductible, but does not require an offer of these deductibles.  Citizens and most insurers only offer sinkhole policies with a 10% deductible.  The bill also establishes a Citizens Sinkhole Repair Program to be operational by March 31, 2015.  The program will utilize approved repair contractors to ensure sinkhole repairs are completed.  Participation in the program will be mandatory for Citizens’ insured’s.  The bill establishes criteria to be an approved contractor.  Each sinkhole loss claim is submitted to the approved stabilization contractors who can submit itemized offers to Citizens for the stabilization repairs contained in the engineering report.  Policyholders will get to choose from a list of qualified approved contractors.  If the repairs cannot be made within policy limits, then Citizens can pay up to the policy limits to the policyholder (and no repairs will be made).  Repairs must be warranted by the contractor for at least 5 years.  The policyholders’ sole remedy is specific performance. The bill does not appear to be moving in the Senate at this point. HOUSE CONSIDERING CITIZENS’ REFORM PACKAGES The House is considering two Citizens’ reform packages which do not exactly match the Senate packages at this time. The House is taking a more conservative approach to property reform at this juncture.  HB 1109 by Representative Wood contains only a couple of reforms:

Currently, bid protests for goods and services purchased by Citizens go before the Board.  This legislation creates the same process for Citizens that exists for state agencies, which allow bid protests to go before an administrative law judge at the Florida Division of Administrative Hearings.  After receipt of a recommended order, the Board may overturn it for facts inconsistent in the record, or due to a disagreement with the law; thereafter appeals go directly to the First District Court of Appeals, the court directly below the Florida Supreme Court; and

Allows surplus lines insurers to participate in the Clearinghouse and make offers only on homes which receive no offer in the Clearinghouse from an admitted insurer.  The bill only includes surplus lines insurers that maintain surplus of $50 million, rated superior, excellent, exceptional or equally comparable financial strength by a rating agency acceptable to OIR, which purchase reinsurance covering their 100 year PML at least twice in a single season, and which obtains signed notices from the policyholder that an offer of coverage does not affect Citizens eligibility, and that surplus lines policies are not covered by FIGA or are not subject to rate review by the OIR, and other disclosures.  Policyholders are not made ineligible for coverage in Citizens by virtue of receiving an offer from a surplus lines insurer, and are re admitted to CPIC without underwriting for 36 months after being diverted.

It is unlikely that Representative Wood has the votes to advance the surplus lines portion of his bill. At this point, there will either be no bill or a significantly watered down version; this bill is paired with SB 1672 by Simmons which passed the Senate.

HB 1089 by Representative Raschein from Monroe County contains similar provisions to the Senate bills:

Provides exemptions for improvements to structures seaward of Coastal Control line in a county where 75% of policies are written by Citizens;

Any alternate study regarding wind mitigation discounts must be submitted as part of next Citizens’ rate filing; and

OIR may develop an addendum to the building code form for use in counties with stringent building codes.

HB 1089 passed the full House and has been transmitted to the Senate. FLORIDA INSURANCE GUARANTY ASSOCIATION ASSESSMENT LEGISLATION ADVANCESThis legislation requires new insurers with no prior year premium to make a good faith estimate and remit funds to the Florida Insurance Guaranty Association (“FIGA”) upon the occurrence of an assessment;  requires all assessments to be made by all insurers beginning and ending on the same dates;  eliminates rate filings with the OIR;  requires a true up filing with FIGA; requires insurers that over collect to remit all such funds to FIGA, and those that under collect to maintain a credit to be used with FIGA on a future assessment; allows FIGA to waive the up-front payment and collect assessments on a monthly payment option if FIGA maintains at least 6 months cash-flow; and clarifies that advanced assessments grant insurers a statutory accounting asset for the full amount advanced. The legislation has been amended into HB 375 and is headed back to the House. MAXIMUM SPEED LIMIT INCREASE Senate Bill 392 passed the full Senate. This legislation raises the speed limit on access highways to 75 miles per hour and certain other highways to 70 miles per hour. Additionally, the Department of Transportation is authorized to set such maximum and minimum speed limits over other roadways under its authority as it deems safe, not to exceed a maximum of 65 miles per hour. MOTOR VEHICLE UNDERWRITING AND CANCELLATION PERIOD LEGISLATION ADVANCES The full Senate passed SB 490. This legislation increases the motor vehicle underwriting period to a 60-day period instead of a 30-day period for the non cancelable coverage required to reinstate driving privileges revoked or suspended for DUI or failure to maintain required security. This change will make the underwriting period for all motor vehicle insurance policies a uniform 60 days.

Please call L & S Insurance at 1-888-244-7400  for quotes on Home, Auto, Business & Commercial, Flood, and Life & Financial products as well.

The Florida Senate on Friday voted 22-16 for a property insurance bill that could result in homeowners seeking coverage from Citizens to be shifted to a private surplus line insurance company. Surplus line companies are not subjected to the same regulations as companies based in the state.

Several senators objected to the legislation, including Republicans who live in areas with heavy concentrations of customers with the state-created Citizens.

“We have insurance regulation in the state of Florida for a good reason,” said Sen. Jeff Clemens, D-Lake Worth. “It’s to make sure consumers in Florida aren’t being taking advantage of.”

The Senate bill (SB 1672) would add surplus line insurers to those insurers that could be offered business through the clearinghouse starting in January.

Sen. David Simmons, R-Altamonte Springs, defended the bill and said it would give homeowners another choice for coverage. He said homeowners would be told ahead of time that the surplus line insurers are not regulated the same way as other insurers.

Simmons added that homeowners would also be allowed to move back to Citizens after receiving coverage from the surplus line insurer. He also noted some Floridians already insure their homes with these type of insurers.

Fort Lauderdale customers are among those that could be affected by this as well as Tampa residents in the Sinkhole areas. Please call L & S Insurance at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial, and Life & financial products as well. Please enjoy the full article below.

http://www.insurancejournal.com/news/southeast/2014/04/28/327411.htm

A Florida property insurer that provides insurance coverage to 128,000 homeowners is planning to go public by issuing an initial public offering (IPO) that could result in the insurer raising up to $100 million in new capital.

The insurer, however, has yet to announce how many shares of stock it will sell and at what price. The IPO filing also does not include whether the stock will be traded on NASDAQ or NYSE stock exchanges.

“We may use this offering to pursue expansions of the insurance products that we offer in existing and new markets.”

Those additional products could include commercial residential and manufactured housing, along with other non-residential coverage such as general liability.

Heritage also stated it will use some of the funds to beef-up its reinsurance program, which largely depends on the Florida Hurricane Catastrophe Fund.

While its overall reinsurance program is not in place for the 2014 hurricane season, last year it had treaties with 13 private reinsurers. It also has coverage through its reinsurance subsidiary, Osprey Re. Ltd.

Please call L & S Insurance at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial and Life & Financial products as well.

http://www.insurancejournal.com/news/southeast/2014/04/25/327328.htm

Please call L and S Insurance at 1-888-244-7400 for Flood Insurance info and quotes on Home, Flood, Auto, Business and Commercial, Life and financial products as well.
You can use the interactive map viewing tool to find out if your home or business is in a flood zone. To use the tool, follow these steps:

1. Click on the search tool below.
2. Type in the address of your property in the area at the top right, above the map titled “Find address or place”, and click on the magnifying glass to search.
3. Use the tool on the left side of the map to zoom in and locate your property.
4. Click on your property and the 2011 FEMA Flood Designations box will let you know your current and proposed FEMA flood zone designation.

http://www.arcgis.com/home/webmap/viewer.html?webmap=64a60d8ee29d4bbc90e5156762ed8855

Privatization of the National Flood Insurance Program (NFIP) would present a huge growth opportunity to the property/casualty market, allowing insurers to tap into about $3.3 billion of yearly premiums. But the flood insurance market has a long way to go before it becomes viable for profit-driven carriers and investors, says Deloitte in its newest white paper.

despite the opportunities flood insurance presents, most insurers will likely pass on taking a piece of the risk unless the obstacles that undermined the NFIP’s solvency and put it $30 billion in debt are dealt with first.

Among those obstacles:

• FEMA estimates that 20 percent of insured property owners pay subsidized premiums, and many of those properties are in high-risk areas. Underpricing of flood insurance to make coverage affordable might actually be encouraging construction in high-hazard areas.
• Repetitive loss properties account for a large share of all flood insurance exposures.
• Convincing property owners to purchase flood insurance remains a challenge. Indeed, only 18 percent of properties in flood zones are believed to have coverage.
• Many homeowners believe recently updated flood maps may be overstating their flood risks.
• Property owners with lower flood exposure often pass on the coverage, while those in flood-prone areas may assume that federal disaster assistance will help them if a major flood event occurs.

some solutions:

• Private carriers could write a certain level of primary coverage while reinsuring catastrophic levels with the federal government.
• The NFIP could purchase reinsurance from the private sector, spreading the risk and limiting exposure in high-catastrophe years.
• The capital markets could help spread risks through the sale of catastrophe bonds.
• Private insurers could combine their resources and diversify risk through a flood insurance pool.
• Private insurers could pick up more moderate flood risks, leaving the NFIP in place as the insurer of last resort.

Please call l & S Insurance at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial, & Life & Financial products as well.

Please enjoy the full article below;

http://www.insurancejournal.com/news/national/2014/04/16/326285.htm

April reinsurance renewals saw significant price drops, and June renewals could see double-digit drops for Florida property-catastrophe risk, according to Fitch Ratings.

“The price declines, along with more generous policy terms and conditions, result from recent low catastrophe losses and continued abundant reinsurance capacity from both traditional reinsurance and the growing alternative capital market,” Fitch says in a statement.

Last year, Fitch says, Florida rates dropped by up to 25% in June.

No major hurricane has made landfall in the U.S. since Hurricane Wilma hit Florida in 2005, which Fitch says is the longest interlude since the 1860s. This has led to a build up in capital for reinsurers, which has further pressured rates. “But we still believe Florida reinsurance risk is adequately priced despite the recent rate declines, particularly compared with property-catastrophe reinsurance pricing in other countries, which tends to be more fragmented and not as easily modeled,” the ratings agency says.

Fitch says the April 1 renewal period primarily focused on the Asian market. “Japanese catastrophe loss-free pricing was down as much as 17.5% for earthquake and 15% for wind and flood risks,” Fitch states. “This reflects the effective payback reinsurers have received

Please call L & S  Insurance at 1-888-244-7400 for quotes on Home, Auto, Flood, Business & Commercial and Life & financial products as well. Please enjoy the full article below.

http://www.propertycasualty360.com/2014/04/09/reinsurance-rates-appear-set-to-come-under-even-mo?eNL=5346fda5150ba0e22955a3c8&utm_source=KirschnersFL&utm_medium=eNL&utm_campaign=Kirschners_eNLs&_LID=106194333

(Bloomberg) — Rising heat in the equatorial Pacific Ocean portends the quietest Atlantic hurricane season in five years, Colorado State University researchers said.

Nine named storms, with winds of at least 39 miles (63 kilometers) per hour, are expected to develop this year, with three of them growing into hurricanes and one becoming a major storm, said Phil Klotzbach, lead author of the forecast.

The last time the Atlantic produced only nine named storms was 2009, which was also a year in which an El Nino formed, according to the National Hurricane Center in Miami. That was the least number of such storms since 1997, which had eight.

El Nino is important to the forecast because warm waters in the equatorial Pacific trigger atmospheric changes that lead to more wind shear across the tropical Atlantic.

Shear is when winds at different altitudes blow in multiple directions or speeds. That can tear apart the structure of a budding tropical system, rip the top off a hurricane or knock a storm over, weakening it or breaking it apart.

The U.S. Climate Prediction Center has issued an El Nino watch this year, and the Australian Bureau of Meteorology says the chances are greater than 70% that one will form.

Colorado State’s hurricane outlook is one of the leading forecasts because William Gray, now professor emeritus of atmospheric science, pioneered seasonal predictions.

Please call L & S Insurance at 1-888-244-7400  for quotes on Home, Auto, Flood, Business & Commercial, & Life & Financial products as well. Please enjoy the full article below;

http://www.propertycasualty360.com/2014/04/10/colorado-state-predicts-below-average-atlantic-hur?eNL=5346d316160ba0e606e9f149&utm_source=FloridaInsuranceMonitor&utm_medium=eNL&utm_campaign=PC360_eNLs&_LID=74308859

Citizens launched the clearinghouse at the end of January, making it the latest tool for the insurer to reduce its 940,000-plus policyholders.

Until recently, four insurers were participating in the clearinghouse program including Ark Royal Insurance Co., Cabrillo Coastal General Insurance Co., Florida Peninsula Insurance Co., and United Property & Casualty Insurance Co.

As of March 30, six other insurers had joined the clearinghouse: American Traditions Insurance Co., Modern USA Insurance Co., Federated National Insurance Co., First Community Insurance Co., Heritage Insurance Co., and the Tower Hill Insurance Group.

So far, the clearinghouse has led to 1,173 Citizens applications being deemed ineligible for Citizens’ coverage, representing $302 million in exposure. Of those, 658 applications have been confirmed as finding coverage with one of the participating insurers.

That number, however, is just a fraction of the number of applicants being submitted by agents. As of March 3, the latest data available, agents have submitted 26,714 requests for coverage, of which fewer than 20 percent received an offer of coverage from one of the four participating insurers.

Professional Insurance Agents of Florida CEO Corey Matthews said that it is far too soon to measure the success of the clearinghouse. However, he said, so far insurers are not appointing as many agents as hoped for.

Even so, said Matthews, agents remain optimistic that eventually it will open new markets to them.

Please call L & S Insurance at 1-888-244-7400 for quotes on Home, Flood, Auto, Business & Commercial and Life & Financial products as well. Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2014/04/09/325829.htm