I urge everyone to look at the consent order. Look at all of the rules that were violated by this company. It was much more than allowing unlicensed people (I won’t say agents) to write policies. The only justice served would be a complete shut down of a company like this.
Mr. Solvent is correct! It took far too long for OIR to do something about this company. People’s PR machine has been at work to say that “these issues do not impact our existing policyholders; their insurance coverage remains in full effect”. Are they stepping up to the plate to review the policies they have that have not been rated correctly?
It is about time. As an owner of an agency in Palm Beach we lost quite a few of our policy holders to People’s Trust – I just had a feeling it was not on the up & up… Are they self insured for E&O exposure?
McCarty acts like it’s no big deal that the company has not only violated the guidelines in their filing but they’ve broken about every fundamental rule with writing home insurance. They just need to “slow down & re-focus”? How about acquire some integrity & business ethics. Can you imagine McCarty’s response if State Farm had completely ignored the guidelines they had filed with the DOI?
1. Start a company with borrowed 5 million.
2. Create a MGA to administer (Ha) the company.
3 Charge 65% of the premiums for doing so.
4. Put together some bulls*it reinsurance
5. Give the keys to FIGA when the wind blows.
6. Let all the citizens and good carriers,if any are left to pay for your loses through FIGA assessments.
7. Pay off the 5 million loan and pocket the rest through your MGA.
My agency saw a couple flock to People’s Trust. Certainly the ones who trust the advice we give as agents won’t leave. I don’t mind competition. You don’t hear me badmouthing GEICO or Response…they at least follow their own rules.
Define adequately capitalized. from what I understand, the carriers needed to have 5 Mil capital to get the state funds. They were doing OK, mostly operating on their lines of credit. As their regular (not cat losses) are starting to occur, they have no money.
I wouldn’t trust one of these with my home. I would probably go with one of the non-admitted carriers that doesn’t participate in the FL Cat fund AND has a AM Best rating.
Problem is that this is Florida, where every year we run the risk of a strong hurricane. You can be adequately capitalized on day one with no worries. However on day 30 when you have written 1,000 policies with no regard to PML and inadequate premium rate and no reserves for the 10 year storm, 30 year storm and 100 year storm, you got a problem. The potential for disaster just keeps getting worse as these start up carriers write more and more policies.
A well funded startup (funded with CASH from investors) combined with a responsible reinsurance plan that doesn’t rely heavily on the CAT fund isn’t a bad bet. The problem is that a lot of startups go with $7 million (5 is minimum but difficult to get a cert of authority) of borrowed money with no option to borrow any more. You really need to do research on a company’s admitted assets and policyholders’ surplus before deciding to insure with them.
Bendover, if what you say is true, why does it continue? Pardon me if I seem obtuse but why not increase capitalization requirements ito account for the 10, 20, 30, or 100 year storm?
Because if it wasn’t for the start up carriers, the only option for home insurance in Florida would be the state run company of Citizens Insurance Co. The state is trying to spread the risk but at the same time the politicians are making Citizens the market leader by not allowing them to charge adequate rate. Citizens is supposed to be the insurer of last resort.
Easy, Ben Dover. There is another alternative besides citizens and/or startups. That would be to let regular insurers charge a rate that represents the true cost (risk) of doing business in Florida. Don’t we all know thats the end game anyway?
Step back and think about this in simple terms. If the leading personal lines carrier in the US (Sate Farm) loses $0.20 for every $1.00 of premium it takes in, how can a brand new company without similar expertise or resources write the same business for less money and be profitable? They can’t. In Florida the start-ups collect premiums until the wind blows, then the start ups blow away and the cycle starts all over again. . .
Actually Pat, State Farm and other legacy carriers have a lot of legacy costs and frankly bad risks on their books. Newer insurers have the option of selecting only the risks they want to accept.
Also, State Farm irritates me as they really cooked the books to show that kind of loss. Marketing expenses for a product you don’t plan on marketing any longer? PLEASE.
I don’t think it’s the state’s job to dictate rates, but as I said, the new carriers do have some advantages.
Correct. It’s not the state’s job to dictate rates especially when they don’t have a full grasp of the situation. And you’re right about SF’s issue of it’s “legacy” costs. They have inherent problems in their homeowners book (low DD’s, older homes, Wind Mit. credits that were doubled, expansive coverages)that make it nearly impossible to buy reinsurance in the private market and/or compete with a startup carrier. They probably need the rate relief. Let them have it.
On the other hand, we’ll all pay through FIGA assesments when someone like People’s Trust acts so recklessly and goes down. The OIR must be as vigilant with underpriced, reckless carriers as it has been with SF’s attempts at acquiring rate increases.
It simply is disgusting that the regulator in Florida allowed this to go on to the point that they had to shut them down. It is obvious to all us simple folk that with the amount of direct mail and grossly expensive news print ads that this company was spending a ton of money and must have been writting quite a bit of premium at the same time. They show a loss of $2.5 million in surplus in the first 6-9 months. Why did the OIR not step in and harass the hell out of this carrier months ago like they did with Allstate, State Farm and the solvent carriers that they ran off.
This Gold guy at Peoples trust has sent thousands of dollars to the Governors campaign account and was allowed to run amuck until the complaints rolled in and action was demanded. This was the new concept that was going to be the salvation for the loss of State Farm. Well if there is one thing the Michael Gold learned is that the regulation in the Floirda insurace arena is harsh, oppressive, unnecessary, costly and anti business. He was just allowed to live his first and probably last year in business, without the regulation that will now be his worst nightmare. Buddy, you will soon realize that you can not low ball prices just because you want to offer a cheaper alternative to the public that has been taken advantage of for so long by insurance companies. Lesson one, they have been taken advantage of by politicians not insurance companies. Lesson 2 the reinsurers charge carriers according to what the book of business is, not what you say it is. your rates are going to go thru the roof because the world knows you don’t know what you really insure. Figa will sting you if you continue to lie to them about your actual exposure and mitigation factors. Lesson 3 the public will be your worst enemy not agents that you resent so much. Lesson 4, its not all about price, you have a 5hitty policy that lacks important coverage your customers need. If you had knowledgable staff, not just freshly green trainees with a cheap license that you bought with a 3 day seminar, your clients would be better off and probably not have bought the crap your staff sold. Once your staff realizes that you are not capable of staying in business without MAJOR changes and rate increases they will have a hard time using you on a resume. Lesson 5, your insurance is only as good as the agent that sold it to you.
Lesson 6, if it seems to good to be true, your about to be suckered. That last lesson is for consumers.
Is this not the same company/CEO that slammed SF after their announcement to get out of the property market, and claimed that they had capacity to take on a ton of the SF policies? Also the same CEO that he had developed a great plan put together to rescue the Florida Catastrophe market and planned to go over the plan in the next couple weeks with McCarthy.
Here I’ve been waiting to see what this wonderful plan was that he had put together to save everyone, and you wouldn’t believe the disappointment I had when reading about him and his company in the last few days.
This whole thing is ridiculous, all the independent agents who keep trying to make themselves look better by dumping on the competition is sad and unfortunately childish. Why don’t they worry about what they think they are doing so well and base their issues on that, maybe how great their prices are, or how easy it is to get an agent to get back to you, Oh yeah, I forgot, this is what everyone who switches to People’s Trust complains about. None of the independent agents ever take the time to explain to their customers what coverage’s are and what they need and don’t need. Why does a 400,000.00 townhome with no yard need 40,000.00 of additional or other structures coverage. Why did SF continuously give their clients 75% personal property with no replacement cost. People’s Trust isn’t a bad policy it is a realistic one that meets the accurate needs of its clients. Every thing possible that the OIR has asked of the company to fix has been done or is being worked on with no hidden adgendas. Why are there companies out there with policies that have the same coverage but cost thousands more, where is that money going? Why do the agency owners drive Mercedes, Jag’s and BMW’s, who is making those payments, let me guess, THE CONSUMER! Some of you all should not listen to all the hype and criticism and do your own research, you may find out the information you are being fed is very incorrect.
“Get over it” must be an employee of Peoples Trust. The initial policy offering by Peoples Trust to the public is a stripped down, high deductible policy that probably wouldn’t pay a nickel if a hurricane took off the roof of their house because the deductible is so high! If a consumer has little knowledge of insurance, they’d be paying alot of money for no or little coverage.
I was dropped in a 50,000 policy drop by a company that I have numerous other policies with. I contacted Peoples over 5 times & received various prices but at no time did they contact me by phone, letter or email to try to sell me. I thought this was odd as they did not follow up on live contacts that needed their product, but I haven’t received any promotions from any of the local agents either.
i agree with get over it. I’m guessing the bulk of the negative remarks and complaints are coming from “licensed insurance agents” who can’t compete with PTI. Why do i have to be forced to pay inflated personal property premiums and rebuild costs. Spare me the cost of your license and provide a realistic homeowners premium.
I am insured with People’s Trust Insurance and have been since March. They duplicated my previous policy with State Farm and saved me over $1,000!!!
I have the lowest deductible offered and my coverage is EXACTLY the same. I referred all my friends and family and they were all able to save as well. Although I was concerned when I heard they were told to stop writing new business, I called and spoke with a very nice customer service representative, and she explained that they took on to much business and just needed to slow down and review all the policys and accomodate the State’s requests. I have no worries they will be back to writing very shortly. I have no complaints about this company!
I urge everyone to look at the consent order. Look at all of the rules that were violated by this company. It was much more than allowing unlicensed people (I won’t say agents) to write policies. The only justice served would be a complete shut down of a company like this.
Mr. Solvent is correct! It took far too long for OIR to do something about this company. People’s PR machine has been at work to say that “these issues do not impact our existing policyholders; their insurance coverage remains in full effect”. Are they stepping up to the plate to review the policies they have that have not been rated correctly?
It is about time. As an owner of an agency in Palm Beach we lost quite a few of our policy holders to People’s Trust – I just had a feeling it was not on the up & up… Are they self insured for E&O exposure?
McCarty acts like it’s no big deal that the company has not only violated the guidelines in their filing but they’ve broken about every fundamental rule with writing home insurance. They just need to “slow down & re-focus”? How about acquire some integrity & business ethics. Can you imagine McCarty’s response if State Farm had completely ignored the guidelines they had filed with the DOI?
These start up carriers are a PONZI!
1. Start a company with borrowed 5 million.
2. Create a MGA to administer (Ha) the company.
3 Charge 65% of the premiums for doing so.
4. Put together some bulls*it reinsurance
5. Give the keys to FIGA when the wind blows.
6. Let all the citizens and good carriers,if any are left to pay for your loses through FIGA assessments.
7. Pay off the 5 million loan and pocket the rest through your MGA.
WAKE UP! THIS IS THE PLAN IN PLACE
Get a real actuary in there to look at their exposure. Are they solvent based on real reserving techniques or will they go under at a hint of wind?
These carriers can’t afford the loss expenses even if their FL Cat Fund reinsurance pays the claims.
They can’t get renewed lines of credit, to pay operating expenses and regular non-cat losses.
Run don’t walk, all of the start up companies are in the same boat.
My agency saw a couple flock to People’s Trust. Certainly the ones who trust the advice we give as agents won’t leave. I don’t mind competition. You don’t hear me badmouthing GEICO or Response…they at least follow their own rules.
You know Bill, I think we have all seen this post enough. You send in on different topics every few days. Try something else.
What is the definition of a ‘start-up’ carrier?
Start up = brand new.
If a startup is adequately capitalized, is there a need to worry about insuring with one?
Define adequately capitalized. from what I understand, the carriers needed to have 5 Mil capital to get the state funds. They were doing OK, mostly operating on their lines of credit. As their regular (not cat losses) are starting to occur, they have no money.
I wouldn’t trust one of these with my home. I would probably go with one of the non-admitted carriers that doesn’t participate in the FL Cat fund AND has a AM Best rating.
Problem is that this is Florida, where every year we run the risk of a strong hurricane. You can be adequately capitalized on day one with no worries. However on day 30 when you have written 1,000 policies with no regard to PML and inadequate premium rate and no reserves for the 10 year storm, 30 year storm and 100 year storm, you got a problem. The potential for disaster just keeps getting worse as these start up carriers write more and more policies.
A well funded startup (funded with CASH from investors) combined with a responsible reinsurance plan that doesn’t rely heavily on the CAT fund isn’t a bad bet. The problem is that a lot of startups go with $7 million (5 is minimum but difficult to get a cert of authority) of borrowed money with no option to borrow any more. You really need to do research on a company’s admitted assets and policyholders’ surplus before deciding to insure with them.
Bendover, if what you say is true, why does it continue? Pardon me if I seem obtuse but why not increase capitalization requirements ito account for the 10, 20, 30, or 100 year storm?
Because if it wasn’t for the start up carriers, the only option for home insurance in Florida would be the state run company of Citizens Insurance Co. The state is trying to spread the risk but at the same time the politicians are making Citizens the market leader by not allowing them to charge adequate rate. Citizens is supposed to be the insurer of last resort.
Easy, Ben Dover. There is another alternative besides citizens and/or startups. That would be to let regular insurers charge a rate that represents the true cost (risk) of doing business in Florida. Don’t we all know thats the end game anyway?
Step back and think about this in simple terms. If the leading personal lines carrier in the US (Sate Farm) loses $0.20 for every $1.00 of premium it takes in, how can a brand new company without similar expertise or resources write the same business for less money and be profitable? They can’t. In Florida the start-ups collect premiums until the wind blows, then the start ups blow away and the cycle starts all over again. . .
Actually Pat, State Farm and other legacy carriers have a lot of legacy costs and frankly bad risks on their books. Newer insurers have the option of selecting only the risks they want to accept.
Also, State Farm irritates me as they really cooked the books to show that kind of loss. Marketing expenses for a product you don’t plan on marketing any longer? PLEASE.
I don’t think it’s the state’s job to dictate rates, but as I said, the new carriers do have some advantages.
Correct. It’s not the state’s job to dictate rates especially when they don’t have a full grasp of the situation. And you’re right about SF’s issue of it’s “legacy” costs. They have inherent problems in their homeowners book (low DD’s, older homes, Wind Mit. credits that were doubled, expansive coverages)that make it nearly impossible to buy reinsurance in the private market and/or compete with a startup carrier. They probably need the rate relief. Let them have it.
On the other hand, we’ll all pay through FIGA assesments when someone like People’s Trust acts so recklessly and goes down. The OIR must be as vigilant with underpriced, reckless carriers as it has been with SF’s attempts at acquiring rate increases.
It simply is disgusting that the regulator in Florida allowed this to go on to the point that they had to shut them down. It is obvious to all us simple folk that with the amount of direct mail and grossly expensive news print ads that this company was spending a ton of money and must have been writting quite a bit of premium at the same time. They show a loss of $2.5 million in surplus in the first 6-9 months. Why did the OIR not step in and harass the hell out of this carrier months ago like they did with Allstate, State Farm and the solvent carriers that they ran off.
This Gold guy at Peoples trust has sent thousands of dollars to the Governors campaign account and was allowed to run amuck until the complaints rolled in and action was demanded. This was the new concept that was going to be the salvation for the loss of State Farm. Well if there is one thing the Michael Gold learned is that the regulation in the Floirda insurace arena is harsh, oppressive, unnecessary, costly and anti business. He was just allowed to live his first and probably last year in business, without the regulation that will now be his worst nightmare. Buddy, you will soon realize that you can not low ball prices just because you want to offer a cheaper alternative to the public that has been taken advantage of for so long by insurance companies. Lesson one, they have been taken advantage of by politicians not insurance companies. Lesson 2 the reinsurers charge carriers according to what the book of business is, not what you say it is. your rates are going to go thru the roof because the world knows you don’t know what you really insure. Figa will sting you if you continue to lie to them about your actual exposure and mitigation factors. Lesson 3 the public will be your worst enemy not agents that you resent so much. Lesson 4, its not all about price, you have a 5hitty policy that lacks important coverage your customers need. If you had knowledgable staff, not just freshly green trainees with a cheap license that you bought with a 3 day seminar, your clients would be better off and probably not have bought the crap your staff sold. Once your staff realizes that you are not capable of staying in business without MAJOR changes and rate increases they will have a hard time using you on a resume. Lesson 5, your insurance is only as good as the agent that sold it to you.
Lesson 6, if it seems to good to be true, your about to be suckered. That last lesson is for consumers.
Is this not the same company/CEO that slammed SF after their announcement to get out of the property market, and claimed that they had capacity to take on a ton of the SF policies? Also the same CEO that he had developed a great plan put together to rescue the Florida Catastrophe market and planned to go over the plan in the next couple weeks with McCarthy.
Here I’ve been waiting to see what this wonderful plan was that he had put together to save everyone, and you wouldn’t believe the disappointment I had when reading about him and his company in the last few days.
This whole thing is ridiculous, all the independent agents who keep trying to make themselves look better by dumping on the competition is sad and unfortunately childish. Why don’t they worry about what they think they are doing so well and base their issues on that, maybe how great their prices are, or how easy it is to get an agent to get back to you, Oh yeah, I forgot, this is what everyone who switches to People’s Trust complains about. None of the independent agents ever take the time to explain to their customers what coverage’s are and what they need and don’t need. Why does a 400,000.00 townhome with no yard need 40,000.00 of additional or other structures coverage. Why did SF continuously give their clients 75% personal property with no replacement cost. People’s Trust isn’t a bad policy it is a realistic one that meets the accurate needs of its clients. Every thing possible that the OIR has asked of the company to fix has been done or is being worked on with no hidden adgendas. Why are there companies out there with policies that have the same coverage but cost thousands more, where is that money going? Why do the agency owners drive Mercedes, Jag’s and BMW’s, who is making those payments, let me guess, THE CONSUMER! Some of you all should not listen to all the hype and criticism and do your own research, you may find out the information you are being fed is very incorrect.
“Get over it” must be an employee of Peoples Trust. The initial policy offering by Peoples Trust to the public is a stripped down, high deductible policy that probably wouldn’t pay a nickel if a hurricane took off the roof of their house because the deductible is so high! If a consumer has little knowledge of insurance, they’d be paying alot of money for no or little coverage.
I was dropped in a 50,000 policy drop by a company that I have numerous other policies with. I contacted Peoples over 5 times & received various prices but at no time did they contact me by phone, letter or email to try to sell me. I thought this was odd as they did not follow up on live contacts that needed their product, but I haven’t received any promotions from any of the local agents either.
i agree with get over it. I’m guessing the bulk of the negative remarks and complaints are coming from “licensed insurance agents” who can’t compete with PTI. Why do i have to be forced to pay inflated personal property premiums and rebuild costs. Spare me the cost of your license and provide a realistic homeowners premium.
I am insured with People’s Trust Insurance and have been since March. They duplicated my previous policy with State Farm and saved me over $1,000!!!
I have the lowest deductible offered and my coverage is EXACTLY the same. I referred all my friends and family and they were all able to save as well. Although I was concerned when I heard they were told to stop writing new business, I called and spoke with a very nice customer service representative, and she explained that they took on to much business and just needed to slow down and review all the policys and accomodate the State’s requests. I have no worries they will be back to writing very shortly. I have no complaints about this company!