Florida officials and the state’s-backed property insurer were working to find common ground in the aftermath of the political firestorm over the insurer’s proposed large hike sinkhole coverage rates, with the insurer indicating it will implement the approved rates that fall far short of what it says it needs.
Florida Insurance Commissioner Kevin McCarty earlier this week slashed a proposed statewide average 447 percent increase in Citizens Property Insurance Corp.’s sinkhole rates to just 32.8 percent.
While McCarty defended his decision, maintaining the insurer failed to take into effect the sinkhole reforms enacted earlier this year, he also stressed that his decision did follow a late Citizen’s proposal to raise sinkhole rates by only 50 percent this year.
‘They put in a cap, and what they put in that cap is very similar to what we ultimately approved,’ McCarty said
Citizens officials have signaled they will go along with a McCarty’s decision, while expressing hope the sinkhole reforms will improve the insurer’s financial position. In 2010, the insurer collected roughly $32 million in sinkhole premiums verses $200 million in claims, thus triggering the proposed increase.
‘We believe this increase, which is most of the phase-in request, will provides additional premiums while allowing for time for the SB 408 provisions to have an impact of sinkhole losses,’ stated Christine Ashburn, director of legislative affairs for Citizens.
Florida Chief Financial Officer Jeff Atwater was among those who backed McCarty’s action.
‘I thought it was a very solid ruling,’ Atwater said. ‘This was too aggressive of a rate increase that was being asked for.’
The sinkhole saga, however, is far from over with lawmakers vowing to address the issue when they meet next year. Senator Mike Fasano (R-New Port Richey) has already stated he will sponsor a bill reinstating a 10 percent cap on sinkhole rates.
Meanwhile, other lawmakers are considering proposals to bring the insurer more in line with the private sector, a goal shared by Governor Rick Scott.
‘My goal is to make sure that Citizens is financially viable,’ Scott said. ‘Consumers want to have a company they can rely on.’
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