An 11-member task force charged with making recommendations on how to depopulate Florida’s high risk property insurer and return it to its original purpose as a market of last resort is voting today in Tampa today.
The Citizens Property Insurance Corporation Mission Review Task Force has been asked to develop a report on changes — statutory and operational– needed to return Citizens “to its former role as a state-created, noncompetitive residual market mechanism that provides property insurance coverage to risks that are otherwise entitled but unable to obtain such coverage in the private insurance market.”
Citizens has become the largest home insurer in the state. It now has about 1.1 million policies, which is down from a high of 1.4 million due to depopulation efforts undertaken in 2008.
But critics, including private market competitors, want to see Citizens shrink even more. The recommendations before the task force would block more homeowners from accepting policies from Citizens if they have reasonably priced options in the private marketplace.
The task force is being asked whether the so-called “15 percent” rule should be retained. This rule provides that a homeowner with a private market offer can still get Citizens coverage if the premium quote from the private carrier is more than 15 percent higher than the Citizens premium. The adoption of this rule several years ago has meant some homeowners are now in Citizens because it is cheaper, not because there is a lack of private insurance available.
The task force is also being asked to vote whether to eliminate the current freeze on Citizens’ rates that has been in place since 2007.
Today’s meeting is the last for the task force, which must submit its recommendations to the Florida Legislature by Jan. 31.
Members of the task force include representatives of the Legislature, Gov. Charlie Crist, Chief Financial Officer Alex Sink, the Office of Insurance Regulation and Citizens.
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