By Greg Giordano
When Citizens Property Insurance Corporation filed its application for a sinkhole premium increase 45 days ago, a collective shudder went through homeowners covered by Florida’s insurer of last resort. After several years of adjusting to an annual increase in premiums for combined perils at a relatively affordable 10%, the huge rate hikes being sought where enough to drive people to action. A small provision in the recently passed Senate Bill 408 opened the door for the rate increase because it lifted the portion of the cap that applied to solely to sinkhole coverage. With a potential increase in some parts of the state topping 2,000%, the roller coaster pulled out of the station that day for a 45 day journey of ups, downs and rapid turns.
Under the leadership of State Senator Mike Fasano, Sean Shaw of Policyholders of Florida and Jay Neal of Florida Association for Insurance Reform a campaign to defeat the hikes was undertaken. In the days that followed the filing, the roller-coaster swung through the front lines: sign-waving rallies held in several counties, a host of phone calls and e-mails made and sent to the Office of Insurance Regulation, and a public hearing held by the insurance commissioner which was attended by hundreds of protesting homeowners
On September 19th the roller coaster screeched to a halt as, late that evening, Florida’s insurance commissioner Kevin McCarty served up a stinging rebuke of Citizens’ application. In his report the head of the Office of Insurance Regulation stated that “the requested sinkhole rate change…is not supported by credible evidence.” Additionally, several instances were cited in which the provisions of Senate Bill 408 were not taken into consideration at the time the rate filing was made. As a midnight deadline loomed, the Office approved a statewide rate hike of just over 30% statewide, which is a far cry from the 447% originally proposed.
“I am cautiously optimistic now that the rates have been settled,” Senator Fasano states. “It is important that we keep our eyes on the future. Citizens will take a good, hard look at the reasons why the Office of Insurance Regulation did not approve the higher rates originally sought. I have no doubt that the next time round they will be better prepared. However, I intend to continue advocating for putting the cap back on so that Citizens, or any other insurance company for that matter, will not have the statutory authority to ask for future increases.”
The Office of Insurance Regulation ordered Citizens to conduct an independent study before submitting its next rate filing. The study must specifically look at the provisions of the new law that were not taken into account. With the 2012 legislative session starting in January, rather than its usual March start date, the time quickly draws near for potential fixes to the bill that caused this potential disaster from even being stated. Senator Fasano, Sean Shaw and Jay Neal will all be working together to make sure that the this roller coaster train will never again leave the station.Tweet