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Ohio-based Demotech — which rates 397 companies nationwide, 57 of which are in Florida —said Monday that it has suspended ratings guidelines it uses in Florida due to what it is calling an uncertain operating environment in the state.

The ratings firm says no Florida insurers it rates are in danger of failing but there are about 10 to 15 that could see downgrades in March.

Demotech said it will eventually revise its general guidance but, in the meantime, it is advising carriers individually to ensure they are adequately capitalized to handle the now uncertain operating environment

The uncertain operating climate that concerns Demotech refers to Florida’s escalating assignment of benefits crisis that has caused the number of litigated water loss claims to skyrocket over the past few years, particularly for the state-run insurer Citizens. The problem has begun affecting Florida’s private market insurers as well, with many pulling out of areas of the state where the abuse is the most rampant and filing for rate increases.

In addition, two court cases decided at the end of 2016 that Demotech said reversed “industry claims procedures that remain intact in other operating environments” will create unanticipated challenges for insurers that Demotech said it now needs to take into consideration to properly rate companies operating in Florida

Please enjoy the full article below;

http://www.insurancejournal.com/news/southeast/2017/02/07/441177.htm

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