Florida regulators have approved an overall statewide homeowners' insurance rate increase of 6.3 percent for the state's last resort insurer.
Citizens Property Insurance Corp. can use the new rates on Jan. 1, 2014 for new and renewed homeowners policies and Feb. 1 next year for coastal accounts, according to the state Office of Insurance Regulation.
The largest rate hikes, about 10 percent, will be seen in South Florida and along the coast.
The state-run insurer's CEO, Barry Gilway (pictured), says Citizens is "pleased that [the OIR] has agreed with our overall approach."
"The agency's action will allow Citizens to continue providing quality service to our 1.2 million policyholders while reducing the risk of assessments on all Floridians," Gilways continues, in a statement.
Citizens has the ability to assess Florida policyholders should the insurer need money to pay claims following a catastrophic event.
The largest provider of property insurance in the state—a distinction Citizens was never meant to have—originally asked the OIR for an average rate increase on homeowners policies of 6.6 percent and an overall average statewide rate increase of 7.5 percent on all accounts.
Citizens has been working to get to actuarially sound rates following years of mandated rate suppression. Citizens became the low-cost option for homeowners, which bloated its policy count and exposure to risk, which has also been reduced recently by depopulation efforts. A group of private insurers have been approved to take policies from Citizens' books.
Several years ago lawmakers put Citizens on a "glide path" to actuarially sound rates by allowing the insurer to increase rates no more than 10 percent per policyholder. At a rate hearing in August Gilway said the plan is working. In 2011 Citizens needed a rate increase of 56 percent to achieve actuarially soundness. In 2014 Citizens would need an 18.3 percent hike to achieve the same.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
