Florida Gov. Charlie Crist says he’ll sign legislation that increases property insurance rates by 10 percent on more than 1 million customers of the state-backed Citizens Property Insurance Corp.
Crist said that stabilizing the marketplace by helping Citizens reach actuarial soundness offsets the rate hike.
Supporters of the legislation (HB 1495) said Citizens customers would have been looking at rate increases between 40 and 55 percent on Jan. 1 if lawmakers didn’t produce legislation that allows 10 percent hikes spread over several years.
The bill also reduces the state’s $20 billion exposure on the Florida Hurricane Catastrophe Fund by phasing out the upper levels of a state backup pool by $2 billion a year over a six-year period.
“It’s trying to make sure that we stabilize the insurance market and the viability of Citizens Property,” he said. “I think their incremental approach is prudent.”
“That’s wonderful,” said Sam Miller, executive director of the Florida Insurance Council. “We need to be able to rely on the ‘Cat’ fund again.”
He said it also lifts Citizens’ rate freeze done by the Legislature in 2007.
The Office of Insurance Regulation, which makes decisions on rate filings, also applauded the legislation.
“The need, obviously, is there for Citizens to increase its rates,” OIR spokesman Ed Domansky said. “It’s important that Citizens’ rates reflect actuarial soundness to better ensure its customers that claims will be paid.”
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