Fla. Financial Services Dept.: CFO Patronis Issues Statement on Temporary Reinsurance Arrangement

TALLAHASSEE, Florida, July 28 -- The Florida Department of Financial Services issued the following statement and letter on July 27, 2022:

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Florida Chief Financial Officer (CFO) Jimmy Patronis issued the following statement regarding the Office of Insurance Regulation's (OIR) announced plan to establish a temporary reinsurance arrangement with Citizens Property Insurance Corporation and certain insurers. The arrangement between OIR and Citizens Property Insurance Corporation would serve to help stabilize coverage provided by certain carriers that Demotech is in the process of reevaluating. The CFO also applauded the Governor for his work in protecting Florida policyholders.

Florida Chief Financial Officer Jimmy Patronis said, "Our priority remains Florida policyholders, and we will continue working to ensure they get the support they need. The temporary solution that was outlined today by the Governor and Commissioner Altmaier represents the State of Florida's efforts at protecting and helping Florida policyholders.

"We have been in contact with OIR and Citizens Property Insurance, and appreciate their willingness in working together to establish an unprecedented arrangement that would allow for a number of insurers, that Demotech is presently reevaluating, to continue offering coverage for policyholders. This agreement would no doubt provide a lot of comfort to insurance agents who are monitoring things closely on behalf of policyholders.

"The Governor is absolutely right that the reforms passed in the insurance special session are benefitting the overall health of Florida's insurance market. This is one of the reasons why I requested that Fannie Mae and Freddie Mac avoid any knee-jerk reactions related to Demotech's actions.

"My office has been, and continues to be, in constant contact with insurance stakeholders across the state so that they can communicate with their members for the benefit of our communities."

Last week, the CFO issued letters (https://myfloridacfo.com/PressOffice/documents/CFOLetter7212022.pdf) to Fannie Mae, Freddie Mac and the Federal Housing Finance Agency urging them to scrutinize any potential downgrades from Demotech, an insurance credit ratings agency. Following the CFO's letter, Demotech announced they were pausing issuance of ratings to solicit further input from insurers and would announce future ratings at an unspecified date. The Department of Financial Services and Florida's Insurance Consumer Advocate are prepared to support policyholders that may need extra help.

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Original text here: https://www.myfloridacfo.com/sitePages/newsroom/pressRelease.aspx?id=6231