Citizens Continues to Outpace Private Market Writings
Citizens Property Insurance Corporation continues to take on policies at an alarming rate and its premium levels undercut the private market. At latest count, Citizens had almost 1.13 million policies. This is an increase of about 100,000 policies in the last three months. Since last November, Citizens has grown by nearly 400,000 policies.
Even more disturbing, the pace of change in Citizens’ policy count has increased dramatically. A year ago, Citizens was adding 15,000-20,000 policies per month. It now adds twice that many policies each month, averaging over 40,000 additional policies per month over the last six months.
Citizens’ explosive growth presents significant financial exposures to its policyholders and to all Floridians. By law, Citizens is charging artificially low rates. Any shortfalls in its ability to pay claims will be addressed initially through substantial assessments on Citizens’ policyholders. Then, if Citizens still needs claims-paying resources, it would impose assessments to be paid by all Floridians on their property and casualty insurance policies.
Under current law, Citizens’ low rates and substantial policy count are barriers to a healthy private market. If not addressed, this will take years to reverse itself because private market rates continue to increase at levels Citizens cannot match. The Florida legislature will have an opportunity to accelerate the road to recovery in the private market during a special legislative session to be convened in December.