Citizens Weighs Important Decisions
The coming weeks will be important ones for Citizens Property Insurance Corporation as it receives public feedback and considers both its 2013 rate levels and ideas for reducing its size. This week the Office of Insurance Regulation will hold a public forum in Miami to allow interested parties to comment on Citizens’ recommended rates for next year. Citizens submits its recommendations to the OIR, which then has the responsibility of approving the final rate levels. This process is governed by Citizens’ enabling statute, section 627.351, Florida Statutes. The statute specifies that notwithstanding Citizens’ actuarially indicated rates, its annual rate increases cannot exceed 10% at the individual policyholder level. There are some exceptions like the Florida Hurricane Catastrophe Fund’s rapid cash build up factor and sinkhole rates, but in general the statute keeps the amount of Citizens’ rate increases capped each year.
Citizens also continues to discuss potential depopulation proposals. Private market interest in assuming Citizens policies has picked up in 2012 over recent years, and several companies are proposing to assume policies late this year under Citizens’ existing depopulation program. Citizens has been considering other proposals to increase the depopulation activity, and a $350 million surplus note program has emerged as the top option. After recent board and committee meetings did not allow for public input, Citizens has indicated it will hold additional meetings in October to allow public feedback and further consideration by the board.