The American Property Casualty Insurance Association (APCIA) today issued the following statement, attributed to its assistant vice president of state government relations Logan McFaddin, regarding anticipated downgrades of some Demotech-rated Florida insurance companies from A (Exceptional) to S (Substantial) ratings.
“A ‘substantial’ rating, while disappointing, still indicates these companies are well above average in terms of financial stability and are able to continue to serve Florida consumers with a high-level of confidence. Furthermore, a ‘substantial’ rating is considered equal to an AM Best ‘A-‘ rating, which has been recognized by Fannie Mae as acceptable security in the past.
“Over the past several years, the state of Florida has dealt with multiple catastrophic weather events that caused billions of dollars in damages. Florida insurance companies have been there and will continue to be there to help families, individuals, and businesses recover after a disaster.
“However, market factors such as Florida’s crumbling legal environment and lawsuit abuse have had significant consequences in the insurance marketplace and made it challenging for companies to maintain A ratings.
“Even when an insurance company does everything possible to settle a claim efficiently, fairly, and in accordance with a policyholder’s contract, some plaintiffs’ attorneys are using questionable legal tactics to deliberately prevent a claim from being settled in order to file a lawsuit in the hopes of winning skyrocketing settlements.
“Abuse of the system by some hurts all Floridians. This could come in the form of higher costs in the short term, but could also have implications on insurance availability over the long-term.
“The Florida Legislature needs to implement meaningful reforms during the 2020 Legislative Session that reduce lawsuit abuse and restore fairness to Florida’s legal system. APCIA looks forward to working with lawmakers during the upcoming session to address these critical issues.”
The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions—protecting families, communities, and businesses in the U.S. and across the globe.