OIR Approves Additional Citizens Rates
The Florida Office of Insurance Regulation has released a second Order establishing rates for additional product lines at Citizens Property Insurance Corporation. The Office of Insurance Regulation previously issued another order establishing Citizens’ homeowners insurance rates.
The most recent Order sets Citizens’ dwelling fire rates at a 10.4% statewide average increase, which is slightly more than the 9.8% recommended by Citizens in its filing. The wind base rates are approved at a uniform 60% increase by territory and the sinkhole base rates are approved at a uniform 70% increase. Citizens also is directed to implement a sinkhole inspection program that will allow policyholders meeting underwriting criteria to obtain policies with sinkhole coverage while policyholders not meeting the criteria will be limited to procuring catastrophic ground cover collapse coverage.
The commercial residential rates are divided into condominiums and non-condominiums. The rate change for commercial residential properties that are not condominiums is 0.7%, while the condominium rate change is 8.1%. In the High Risk Account, the condominium association wind-only rate change is 11.0%, as compared to the 11.5% rate change recommended by Citizens, and the rate change for commercial residential risks other than condominiums is 11.3%.
For the commercial nonresidential market, the OIR approved a rate change of 9.9% for the wind only program for the class rated business with no change to the builders risk or special class business. The OIR also directed Citizens to submit information within one year supporting the need to continue offering builders risk insurance. For commercial nonresidential multi-peril coverage, Citizens proposed no change and the OIR agreed.
Rate changes vary by territory throughout the state and can be seen in exhibits to the Order.
The OIR directed that in future dwelling fire filings, Citizens should submit statewide and territorial indications using only the public hurricane model in addition to any other indications based on modeling it chooses to include. For commercial residential rate filings, Citizens is asked to include separate statewide and territorial indications for condos and all other business. Citizens also should exclude experience for inividually rated risks and special class rated risks in its future commercial residential filings.
The OIR also directed that in subsequent rate filings include a residual market contingency charge, Citizens must demonstrate that the charge complies with Rule 69O-170.003 and provide for a rate of return based only on risk an not profit. Citizens must consider that it applies a tax-exempt surcharge of 1.75% in addition to the inclusion of a premium tax provision. In addition, Citizens must take into account that if a deficit is incurred, it will apply a 15% policyholder surcharge.