Rate Hearings Point to Continuing Concerns
In December 2019, Joe Petrelli of Demotech, Inc. sent a letter of Barry Gilway of Citizens Property Insurance Corporation describing several concerns with Florida’s residential property insurance market. Petrelli mentioned that several insurers could see downgrades to their Financial Stability Ratings. He acknowledged that last year’s assignment of benefits (AOB) reforms might be beneficial later. However, insurers are feeling the effects of abuses in the Florida market now.
Two recent public notices confirm that concerns in the Florida market are making their way into rates for consumers. In December 2019, the Office of Insurance Regulation announced that it would hold a public hearing related to Edison Insurance Company’s pending rate filing. The filing proposes an overall average increase of 21.9%. Florida law provides for a public hearing when increases reach 15%.
This week, OIR announced a public hearing for Capitol Preferred Insurance Company’s recent rate filing. The rate filing proposes a statewide average increase of 47.0%, which is less than its reported indication.
The filings remain subject to the OIR’s review and eventual approval or disapproval. Nonetheless, proposed increases of this magnitude show that increases in losses and loss adjustment expenses in the Florida market are leading to upward pressure on rates for consumers.