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By Jim Saunders<\/div><\/div>\n

After the Fla.-owned property insurer\u2019s staff announced its recommendation \u2013 an 8% average policy rate increase \u2013 the board rejected it and now wants a full 11%.<\/span><\/span><\/p>\n<\/div>\n

TALLAHASSEE, Fla. \u2013 With thousands of new policies a week pouring into Citizens Property Insurance Corp., the state-backed insurer\u2019s board on Wednesday approved seeking 11% across-the-board rate increases next year.<\/span><\/span><\/p>\n

The Citizens Board of Governors tossed aside a widely reported staff recommendation that, in part, called for increasing homeowners\u2019 rates by an average of 7.3% in 2022, with the hikes varying based on factors such as location.<\/span><\/span><\/p>\n

The 11% increase would still need approval from the Florida Office of Insurance Regulation, and it wouldn\u2019t take effect until August when policies start to renew.<\/span><\/span><\/p>\n

The board also decided to request an across-the-board hike of 12% that would take effect for policies that renew in 2023.<\/span><\/span><\/p>\n

\u201cWhy don\u2019t we go for the 11% and call it a day?\u201d board Chairman Carlos Beruff said after Citizens Chief Actuary Brian Donovan raised it as an option.<\/span><\/span><\/p>\n

The decision, which came after little board discussion and no public input during a meeting in Tampa, would mean Citizens is raising rates by the maximum amounts allowed by a new state law.<\/span><\/span><\/p>\n

In the past, Citizens was prevented from passing along increases of more than 10% a year to individual policyholders \u2013 a concept that has become known as a rate \u201cglide path.\u201d The new law (SB 76) gradually increases that cap to 11% in 2022, 12% in 2023 and ultimately to 15% in 2026.<\/span><\/span><\/p>\n

Citizens, which was created as an insurer of last resort, has seen massive growth during the past two years as financially struggling private insurers have dropped policies and sought large rate increases from regulators. As of Friday, Citizens had 747,654 policies. By comparison, it had 532,788 policies on Nov. 30, 2020, and 444,323 policies on Nov. 30, 2019, according to data posted on the Citizens\u2019 website. Citizens officials expect to have more than 1 million policies by the end of 2022.<\/span><\/span><\/p>\n

Citizens President and CEO Barry Gilway said private property insurers have been losing money in Florida since 2017.<\/span><\/span><\/p>\n

\u201cWhen they\u2019re unprofitable, they want to write less business,\u201d Gilway told the board Wednesday. \u201cThat\u2019s what\u2019s happening.\u201d<\/span><\/span><\/p>\n

Gilway also said Citizens\u2019 rates are \u201cridiculously competitive,\u201d typically charging less than private carriers.<\/span><\/span><\/p>\n

State leaders have long sought to shift policies from Citizens to the private market, at least in part because of potential financial risks if major hurricanes hit the state. But in parts of Florida, homeowners have little choice but to turn to Citizens for coverage.<\/span><\/span><\/p>\n

The Citizens staff recommendation going into Wednesday\u2019s meeting would have led to an average 8% increase in 2022 for what are known as \u201cpersonal lines\u201d accounts. That included the average 7.3% hike for homeowners, along with increases for condominium-unit owners and renters.<\/span><\/span><\/p>\n

It\u2019s unclear whether the Office of Insurance Regulation will allow 11% and 12% across-the-board hikes. In approving 2021 rates, regulators rejected some proposals by the Citizens board, including a proposal that would have led to substantially higher rates for new customers of the state-backed insurer.<\/span><\/span><\/p>\n

Source: News Service of Florida<\/span><\/span><\/p>\n<\/div><\/div>\n

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\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"