CITIZENS PROPERTY INSURANCE

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TAMPA – Jan. 5, 2009 – Policyholders of Citizens Property Insurance Corp. could face sizable rate increases and lose the option to stay with the state-backed property insurer if a task force’s recommendations are approved.

The group meets in Tampa on Tuesday to discuss those and other changes to Florida’s largest property insurer.

Currently, Citizens policyholders can reject offers from private insurers that want to assume their policies. Policyholders would lose that option under recommendations being considered by the 11-member task force charged with returning Citizens to its original role as the state’s insurer of last resort. Private insurers removed nearly 400,000 homeowners policies from Citizens in 2008. More than 33,000 homeowners, however, rejected takeout offers from the private market.

In addition, the task force will consider a recommendation to eliminate the freeze on Citizens’ rates. Eliminating the rate freeze could open the door to a sizable rate increase for policyholders.

In 2005, Citizens asked state regulators for permission to raise rates 44 percent on average.

Instead, regulators approved a 25.9 percent rate increase for Citizens. A few months later, however, the increase was removed and Citizens’ rates were frozen through 2009 with legislation backed by Gov. Charlie Crist, a move designed to punish private insurers for not lowering their rates.

Also, state law was changed to allow homeowners to qualify for Citizens coverage as long as the premiums offered by private insurers were 15 percent higher than Citizens’ rates.

That law would be repealed under a recommendation the task force will consider this week.

The task force will meet for the final time Tuesday at Tampa Airport Marriott and will vote on the recommendations. The task force must submit its recommendations to the Florida Legislature by Jan. 31.

Citizens has 1.1 million policies, down from a high of 1.4 million.

 

Source: http://www.floridarealtors.org/NewsAndEvents/n3-010509.cfm