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June 24--Rare rate cuts at Florida's state-run insurer cleared a committee Tuesday a day ahead of a full board vote, with Citizens Property Insurance Corp. critic and former state Rep. Mike Fasano tweeting, "Must be an election year."
There was even worried talk that lower bills might hurt efforts to move customers to private insurers.
Not everyone shares in the prospective savings. Customers who get only their windstorm coverage from Citizens are looking at a 5.7 percent average increase in Palm Beach County, and wind-only condo customers would see a 7.4 percent hike.
Overall, though, bills would be trimmed an average of 1 percent statewide across all residential and commercial policies. Biggest winners: multi-peril homeowner rates are set to drop 6.3 percent statewide and 7 percent in Palm Beach County, if approved by state regulators for 2015.
The average reduction for standard HO3 homeowner policies is 8.4 percent in Martin, 9 percent in St. Lucie, 7.1 percent in Okeechobee Co., 7.4 percent in Broward and 4.3 percent in Miami-Dade Co.
Members of the company's actuarial and underwriting committee expressed concern Tuesday that rate cuts might make Citizens more competitive with private insurers -- conflicting with goals of moving as many customers as possible out of Florida's insurer of last resort.
Committee member Fred Strauss asked whether rate changes might work against "depopulation" efforts or affect a new clearinghouse, a computer system used by agents. The clearinghouse is tied to rates -- customers are declared ineligible for Citizens if private insurers are offering comparably-priced policies.
Chief risk officer John Rollins said the company is simply following state guidelines for how to set rates, and is reaching adequate prices for many customers. "Actuarily sound" rates for Citizens are not identical to those for private insurers, who may have higher administrative costs and buy more reinsurance, Rollins noted.
In the end, the committee approved the proposed rates unanimously. The full Citizens board meets Wednesday.
In other action Tuesday, Citizens consumer services committee member Christine Ashburn said the company continues to gather information about complaint data included in an article in The Palm Beach Post. The article ranked Citizens No. 2 among the top 30 insurers serving Palm Beach County in complaints relative to number of customers. Citizens does not not classify certain requests for mediation of claims, or evaluation of sinkhole claims, as complaints, though the state's Department of Financial Services does, Ashburn noted.
Citizens has shrunk by 600,000 customers in recent years but remains the state's largest property insurer with 900,000 policies including about 100,000 in Palm Beach County.
(c)2014 The Palm Beach Post (West Palm Beach, Fla.)
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