Citizens Property Insurance Corporation President Carlos Beruff is unhappy with some aspects of regulators’ decision to give the company a partial rate increase, and wants the Legislature to change the law to allow it to charge some owners more next year.
“One of the nonsense things we approached (the Office of Insurance Regulation) for was the ability not to go below zero,” Beruff said at a board meeting. administration of the citizens on Wednesday.
He was referring to The decision of the RIO on citizen rates, which provided an average increase of 6.4% on a typical statewide homeowner’s policy, but also necessitated a reduction in premiums for approximately 55,000 homeowners, as costs related to lawsuits have decreased since the beginning of the year. The citizens asked for a 10.7% statewide rate increase.
Beruff also lamented the practice of taking over policies from failing companies and being required to charge a lower premium.
“The other thing that this dumb company is doing is we’re being forced to take over policies that have failed, companies that have failed,” Beruff said. “We need to reduce the premium from $4,000 to $2,500…only a restricted government agency would be so stupid to operate this way.”
Beruff has ordered staffers to ask the Legislature to change the law next year to prevent rate cuts for some homeowners and allow citizens to charge more on policies he supports. bankrupt companies.
Citizens is a state corporation created by lawmakers in 2002 to act as an “insurer of last resort” for homeowners who could not find affordable coverage in the private market.
An increase in roof and water claims in recent years, combined with an increase in lawsuits, has resulted in operational losses. Although the total number of prosecutions has started to decline, the failure of four property insurers this year means policy growth at Citizens has skyrocketed.
In June 2020, the number of citizen policies stood at less than 475,000. It is now over 900,000 and is expected to reach 1 million before the end of the year.
Increased policies mean increased risk, and therefore increased likelihood that a large hurricane could wipe out citizens’ ability to pay claims and trigger assessments on all homeowners.
President and CEO of Citizens Barry Gilway told the council that Citizens would have $900 million in additional revenue if their rates were “adequate.” Still, Citizens is in a stable position even if a big hurricane were to hit, he said, because of its reinsurance coverage in the Florida Hurricane Catastrophe Fund, or Cat Fund, and the private market.
“When you look at the claims-paying capacity of $6.7 billion in excess, $4 billion in the Cat Fund, over $2 billion in traditional investment – Citizens is in phenomenal financial shape,” said Gilway. “And frankly, we’re prepared for whatever comes.”