This week, the Florida Office of Insurance Regulation denied the rate requests of three companies for not substantially lowering their property insurance rates pursuant to legislation adopted earlier this year.
“Governor Crist and the Legislature made some courageous decisions during the January Special Session and we will not allow companies to file incomplete or inadequate rate reductions affecting the policyholders of this state,” said Insurance Commissioner Kevin McCarty.”
The Office sent Notices of Intent to deny the rate filings because the reduced rates filed did not adequately reflect all of the savings realized when the state offered less expensive reinsurance to companies last spring.
The affected companies are Cypress Property & Casualty with 63,129 policies, asking for a reduction of 5.4 percent; First Floridian Auto and Home with 91,295 asking for a reduction of 8.3 percent; and Travelers Indemnity Company of America with 4,596 policies asking for a reduction of 8.3 percent.
“House Bill 1A made $12 billion of less expensive reinsurance available from the state, and the law requires the insurance companies to pass along that savings to their policyholders in the form of lower rates,” McCarty said. “Not to be invested in extra, duplicative reinsurance contracts or profit margins.”
Companies have until Sept. 30 to submit their final reduced rate filings mandated by the law and the Office will continue to review each one to ensure they are complete and reflect the policyholder savings ordered by the Legislature.
Last week, the Office postponed a public hearing for State Farm Florida Insurance Co., State Farm Florida Fire and Casualty Insurance Co. and State Farm Mutual Automobile Insurance Co. The Office issued subpoenas directing the three companies to appear in Tallahassee to answer questions about its business practices. The companies failed to provide all of the information requested in the subpoenas by the date set forth in the subpoenas; therefore, the Commissioner postponed the hearings until the requested information is provided in its entirety.
Source: Florida Office of Insurance Regulation