Governor Rick Scott


Citizens Property Insurance Corporation’s top executive warned the company’s Board of Governors Wednesday that water loss claims will continue to hamper efforts to reduce rates for many Florida policyholders.

“In claims the critical issue that has surfaced in the past two years is ‘water damage’ claims and this issue is severely impacting the loss picture in South Florida and the rates paid by tri-county constituents,” said President, CEO and Executive Director Barry Gilway.

Since January, 141,680 Citizens customers have found coverage from private companies in the state, the company said in a statement, which has allowed Citizens to shrink to under 586,000 policies from a peak of nearly 1.5 million in 2012.

Still, water loss remains a challenge for Citizens, with 50 percent of all reported new reported claims in 2013 being water damage related. It is especially a problem in Miami-Dade County where water loss claims now account for more than half of every premium dollar collected. If water claims there mirrored trends in other parts of the state, Citizens said, more than nine out of 10 Miami-Dade policyholders would see rate reductions for 2016. Instead, the Office of Insurance Regulation last month approved rates that call for an average 8.1 percent increase for Miami-Dade customers.

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http://www.insurancejournal.com/news/southeast/2015/10/01/383481.htm

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In his June 2 veto letter addressed to Secretary of State Kenneth W. Detzner, Scott expressed his objections to the legislation, saying the bill “undermines progress in growing the number of property insurance options and reducing assessment risks for Florida Families.”

According to the Florida House of Representatives Final Bill Analysis, as of July 1, 2015, a policyholder may elect not to be solicited for takeout more than once in a six-month period.

Scott wrote that this provision was of primary concern to him.

“This provision is inherently unfair to Citizens’ policyholders in that it limits policyholders’ private market options, which means they miss an opportunity to move to a better property insurance alternative,” he wrote.

The Citizens depopulation effort has proven to be successful, yet controversial, in lowering Citizens’ policy count and ensuring the insurer’s ability to pay claims for policyholders that cannot find insurance in the private market. Just this past March, the company announced that it is the smallest it has been since its creation in 2002, with a policy count of less than 600,000 as of March 13. That number represents a huge drop from its highest policyholder count of 1.5 million, or about 26 percent of the Florida residential market, in November 2012.

The insurer’s approved take-outs as of May 15 of this year totaled 632,286 and the total number of policies removed was 110,529.

”The reality is that significant improvements in profitability and the increasing financial strength of companies has been a major factor in our ability to return to our role as the state’s insurer of last resort,” Citizens President and CEO Barry Gilway told the Citizens Board of Governors back in March.

 

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http://www.insurancejournal.com/news/southeast/2015/06/04/370549.htm

My class to realtors covers this topic in great detail. My classes are scheduled regularly with all of the S. Florida Realty associations or I am happy to come to your office and do a class for you and your employee Realtors at a meeting or a  lunch and learn class. Please call me for a  class date at 954-351-2250 x-209 or e-mail me at lee@yourinsurancepros.com  . Please call the office for quotes on Home, Auto, Flood, Business & Commercial & Life & Financial quotes as well.

Living in a (semi)-tropical paradise has a price – and apparently, not even going nine years without a major hurricane strike will change that.

While Florida’s property insurance market has stabilized somewhat since eight storms battered the state in 2004 and 2005, as storms such as Hurricane Wilma caused billions in damages, the state still has some of the nation’s highest homeowners insurance rates. A recent national report showed that Florida’s average homeowner premium of more than $2,000 a year is twice the national average.

But state officials say good news is on the horizon.

And Insurance Commissioner Kevin McCarty insists that lower rates are coming because one of the main expenses for insurers – reinsurance – has been dropping. Reinsurance is the millions an insurer spends with an out-of-state or foreign company to provide the company financial backing in case of major claims.

http://www.insurancejournal.com/news/southeast/2015/06/01/370007.htm

 

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FIGA ASSESSMENTS

Senate Bill 836 by Senator Latvala passed out of the Senate with a unanimous vote in support and has now been sent over to the House, where it was substituted for House Bill 557 and sent to the Governor. Previously reported on in-depth, the bills would revise the procedure in which insurers pay and recoup assessments levied against them by the Florida Insurance Guaranty Association (“FIGA”). It would allow for more opportunities for insurers to remit assessments after they are collected from policyholders, rather than advancing the funds to FIGA, at the option of FIGA.

 

FLOOD INSURANCE

Senate Bill 1094 by Senator Brandes passed out of the Senate with a unanimous vote in support and was sent over to the House. Its companion, House Bill 895 by Representative Ahern, was substituted for the Senate version and passed the House with an 89-26 vote in support. The bill now heads to the Governor, to be signed into law.

 

Reported last week in-depth, the bill would revise the flood insurance reform passed by the Legislature last year. The bill allows for the sale of “flexible flood insurance” and allowing private insurers to obtain certification from the OIR, which would state and compare the coverage specification of the policy with that of the National Flood Insurance Program (“NFIP”). “Flexible Flood Insurance” allows consumers to purchase flood coverage limits which will cover the outstanding mortgage, but will not be enough to repair the home. The bill also allows insurers to provide credits to the policyholder if the OIR determines that the rate being charged was excessive. This practice would be done in lieu of cash refunds.

CITIZENS ELIGIBILITY

Senate Bill 842 by Senator Benacquisto was substituted on the Senate floor for its House companion, House Bill 715 by Representative Raschein, which had already passed out of the House with a unanimous vote in support. The bill then passed the Senate with a unanimous vote in support as well. The bill now heads to the Governor’s desk for consideration.

 

As discussed in past weeks, the bill would allow a home existing seaward of the coastal construction line (“CCL”) to be substantially improved and still be eligible to receive Citizens coverage. Such improvements could be the repair, reconstruction, rehabilitation, or improvement to the structure that costs 50% or more of the market value. The bill would continue the prohibition against Citizens coverage eligibility for new homes seaward of the CCL.

 

 

 

Speaking to the Citizens Board of Governors Wednesday in Maitland, Fla., Citizens President/CEO and Executive Director Barry Gilway said successful depopulation efforts, affordable reinsurance and a vibrant private market have combined to reduce Citizens policy count to 598,408, as of March 13.

Created by the Florida Legislature in 2002, Citizens handled about 602,000 policies in January 2003. Following an unprecedented string of storms in 2004-2005, that policy count peaked in November 2012 at nearly 1.5 million policies, about 26 percent of the Florida residential market.

Barring a major storm, Gilway told board members that Citizens could see its footprint shrink to as low as 450,000 policies as financially sound private companies assume policies that, even a year ago, were expected to remain with Citizens for years to come.

“The reality is that significant improvements in profitability and the increasing financial strength of private companies has been a major factor in our ability to return to our role as the state’s insurer of last resort,” Gilway said, following his presentation to the board.

 

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http://www.insurancejournal.com/news/southeast/2015/03/19/361169.htm

 

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Florida Governor Rick Scott is looking for a replacement for the state’s top insurance regulator and has already contacted a potential candidate from Louisiana.

Scott’s office has confirmed that the governor contacted Ron Henderson, Louisiana deputy insurance commissioner for consumer advocacy, as a possible replacement for Florida’s current insurance commissioner, Kevin McCarty, who has headed the Office of Insurance Regulation (OIR) since 2003.

McCarty has reportedly been targeted for replacement as part a shake-up of top officials by Scott as he embarks on his second term.

In a letter to Chief Financial Officer Jeff Atwater, Scott called for new heads of the OIR, the Office of Financial Regulation and the Department of Revenue.

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http://www.insurancejournal.com/news/southeast/2015/01/27/355570.htm

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A national consumer group is urging Florida to keep its current insurance regulator, a man the group says is one of the best regulators in the country but who is rumored to be under pressure to resign by the Scott Administration.

The Consumer Federation of America (CFA) has reached out to the Florida Financial Services Commission in support of Florida Insurance Commissioner Kevin McCarty, following recent reports that second-term Governor Rick Scott is opposing McCarty’s reappointment.

Hunter hopes that they will act to keep McCarty, he wrote in an email to Insurance Journal. “McCarty is very strong given his great track record,” wrote Hunter.

Hunter said it is not typical for a member of the CFA to reach out in support of an official because usually a state governor would make the final decision and no vote is needed

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http://www.insurancejournal.com/news/southeast/2015/01/23/355006.htm

Florida’s insurance regulator’s tenure could be coming to an end after more than a decade as the newly re-elected governor looks to shake up his administration by replacing the heads of state agencies.

Rumors have been circulating that Insurance Commissioner Kevin McCarty may not survive the transition into Governor Rick Scott’s second term. And Scott’s office isn’t exactly stopping them.

The News Service of Florida reported that in a letter to CFO Atwater on Tuesday, Scott wrote that he hoped the Cabinet could “begin a search for new leadership” at the Office of Insurance Regulation, the Office of Financial Regulation and the Department of Revenue.

Scott’s spokesperson Jackie Schutz said it is important for a governor to have new leaders and new ideas heading into a second term. While not addressing McCarty specifically, Schutz laid out the rationale for finding a replacement for McCarty.

“Executive office positions are not lifetime appointments and for the same reason there are term limits in elected office, it is important to search for the best newest ideas whenever possible,” said Schutz.

“In regard to the Office of Insurance Regulation, we have no announcements at this time,” said Schutz, in what some see as a signal that a change is coming.

Industry representatives are reticent to discuss McCarty, perhaps not wanting to risk antagonizing either McCarty or the next commissioner.

When asked, industry representatives said it is not a matter of one choice or one decision that McCarty has made that got him to this point. Most just say McCarty’s fate is the product of years of unpopular decisions.

Several industry representatives said, “It’s time.”

McCarty is not the only state official whose job is up for grabs.

 

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http://www.insurancejournal.com/news/southeast/2015/01/20/354497.htm

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Florida’s state-backed property insurer is lowering the amount of coverage it provides for high-value properties from $1 million to $900,000, per a 2013 law change.

Citizens Property Insurance Corp. is implementing the change that will apply to all almost all new and renewal high-value business as of January 1.

Florida lawmakers in a 2013 property reform law included a provision calling for lower limits on Citizens policies. Supporters argued that that there is ample coverage for these policies in the private market and doing this would reduce Citizens overall exposure.

The 2013 law created a three-tier coverage reduction with the first scheduled to take effect this year.

Under the law, any property that has a dwelling replacement cost of $900,000 or more is no longer eligible for Citizens coverage. The law also applies to single condominium units that have a combined dwelling and contents coverage of more than $900,000.

Properties that fall between the $900,000 and $1 million level as of December 31, 2015 may retain their Citizens coverage until the expiration of their current policy.

In January 2016, the coverage limit amount is to likewise be reduced to $800,000. Finally, come January 2017, the coverage limit will be reduced to $700,000 where it will stay.

 

http://www.insurancejournal.com/news/southeast/2015/01/06/351763.htm

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Faced with a rising number of consumer complaints, Florida’s state-backed property insurer has announced a series of changes to its takeout program. The news comes as the insurer said it is highly unlikely to need policyholder assessments next year.

Citizens Property Insurance Corp. has been focusing on its depopulation program under which private insurers are allowed to try to assume Citizens policyholders.

Citizens officials said the takeout program has reduced the size of the insurer from its high of 1.5 million policyholders in November 2007 to its current level of 727,000 policies. Those takeouts have sent Citizens exposure down from $511 billion to $229 billion.

All told, this year alone private insurers have assumed 300,000 Citizens policyholders. State regulators just announced that it has cleared the way for five private insurers to assume 132,440 additional policies.

The takeout program, however, is not without its flaws.

Citizens policyholders are being inundated with offers of coverage as multiple private insurers are competing for the same policy. And there is little uniformity with regard to information provided by insurers, some of which neither the agent nor homeowners have previously heard of.

Although an agent or homeowner has the ability to reject the offers of coverage, in cases where multiple insurers make offers of coverage each offer must be responded to.

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http://www.insurancejournal.com/news/southeast/2014/12/11/349765.htm

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