Florida’s Governor Rejects Insurance Rate Increases & Decreases
At first glance in the Florida market where insurance rate increases are causing so much turmoil, you would think that when Governor Charlie Crist rejected 3 insurance carriers requests to decrease their rates it would be met with much disapproval. The fact is, that these decreases were rejected because the proposed decreases were not low enough to satisfy what Florida investors and homeowners need. This in itself gives evidence that the problems faced by property owners in Florida are finally being heard by lawmakers and are starting to get some positive action taken on their behalf.
Three companies in florida submitted for rate decreases, Cypress Property & Casualty proposed a 5.4 percent decrease in rates; First Floridian Auto & Home proposed lowering rates by 8.3 percent; and Travelers Indemnity Company of America which proposed a rate cut of 8.3 percent on average. Florida Insurance Commissioner Kevin McCarty said in an issued statement regarding these rate decreases, “We will not allow companies to file incomplete or inadequate rate reductions affecting the policyholders of this state.” Finally something is starting to be done to help those who are struggling with keeping their properties in the black due to the large increases in taxes and insurance. But that doesnt mean all insurance carriers in Florida are on the right track.
Florida Farm Burueau was recently denied a 26 percent rate increase by the Office of Insurance Regulation. This comes even after Florida legislators passed legislation to help insurance carriers keep their costs down. Under the new law, companies have access to cheaper reinsurance €“ or insurance for insurance companies €“ through the Florida Hurricane Catastrophic Fund. In turn, companies are supposed to pass reinsurance savings on to consumers. So why were these 3 carriers denied a rate decrease then? Tom Zutell, a spokesman for the Office of Insurance Regulation said, €œOn these three particular ones,€ Zutell said, €œthe actuary said that it appears from their reinsurance contracts that they realized a lot more savings in reinsurance than they passed on to the consumer.€
It looks like we’re starting to get on the right track, but the road ahead is a long one.
Peter J. Barnett CCIM
Excerpts taken from The Bradenton Herald, Fla Brian Neill. The Associated Press contributed to this report.
