Florida OIR Approves 31.5% ‘Catch-up’ Rate Increase for TRUE, Despite Missed Filings

Florida’s Office of Insurance Regulation this week approved an average 31.5% increase in homeowner rates for Trusted Resource Underwriters Exchange – one of the largest Florida rate hikes in two years – despite questions about irregularities by the company and potential savings produced by legislative reforms.

The approval bucks the recent trend of minor rate cuts in the state in recent months. Florida Insurance Commissioner Michael Yaworsky has touted the rate decreases or non-increases filed by 45 insurers following Senate Bill 2A, the 2022 legislative reforms that have greatly reduced litigation expenses for insurers. The OIR in February went so far as to slash in half a proposed rate increase by Citizens Property Insurance Corp., Florida’s state-created insurer of last resort.

Officials with Tampa-based Trusted Resource, known as TRUE, said the current Florida landscape may be less costly than it once was for property insurers, but that doesn’t matter much because TRUE is playing catch-up, having failed to make adequate rate filings in past years.

At a June 17 hearing, company representatives revealed that the insurer, which had about 18,250 policies in force in Florida in the first quarter this year, does, in fact, provide a 5% discount on non-hurricane premiums, due to the 2022 law that effectively ended assignment-of-benefits agreements in the state.

“Explain why the company currently offers a 5% … premium credit on AOB exclusion but the company does not recognize the savings from Senate Bill 2A?” asked OIR actuary Daniel Zhong.

Because most of TRUE’s loss experience has come after Senate Bill 2A, its earlier experience was not significantly impacted by pre-reform litigation costs, said Yanfei Atwell, director of actuarial services for TRUE.

“We have very little experience before 2023,” she said at the hearing. “The impact is very immaterial.”

She and other TRUE officials explained that while the carrier was operating as early as 2021, it did not add significant numbers of policies until after the legislative reforms were enacted. TRUE obtained its certificate of authority in late 2020. It was once part of American Family Family Insurance, but a majority stake in the reciprocal was purchased by Gallatin Point Capital in late 2024.

TRUE’s general counsel, Susan Anderson, acknowledged that changes at the top may have led the company to neglect its required paperwork.

“There were a number of years in which we did not take an annual rate filing,” Anderson said at the hearing. “In 2023 and in 2024, there was a change in control in the company, and there were changes in management associated with those changes in control. As a result, the annual rate filings were not made for the company in those years.”

“So the company was not in compliance in the prior years?” Zhong asked.

“That is correct,” Anderson noted.

The higher rate is now needed to make up for the missed filings as well as hurricane losses last year and 2023 and 2024 reinsurance costs, company officials said. Zhong did not press Anderson on the lack of filings.

The 31.5% rate filing was considered a “use-and-file” procedure, in which the insurer imposes the higher rate before seeking approval, as allowed b Florida law. The increase took effect in April of this year and will raise TRUE’s average HO-3 premium from $4,309 to $5,665. The average residential premium in 2025 for the top 30 insurers in Florida was about $3,023, and premiums rose by about 34% from late 2022 to the first quarter of this year, OIR quarterly data show. Reinsurance prices have dropped this year, producing savings for some insurers.

TRUE is likely to file for further rate increases this year or next. Company officials said at the hearing that the indicated rate hike for HO-3 policies this year was almost 60% but TRUE was requesting approval for only half of that at this time.

A July 28 filing shows the company also is planning new endorsements, new surcharges and higher premiums for some Florida homeowners. For screen enclosures and carports, TRUE is asking for approval for surcharges ranging from 10% to 75% of the policy limit on those structures. Additional premium may apply for fungi, rot and bacterial coverage.

TRUE had previously been approved for an 11% HO rate increase in January 2024 and a 15% rise in August 2023, but no changes from 2020 through 2022.

So, why did OIR approve the latest rate change, after repeatedly heralding improved cost factors for insurers and insureds? OIR sent a statement Thursday that echoed Atwell and suggested that TRUE’s 31.5% rate hike was ratified because TRUE had few policies during the worst of the Florida property insurance crisis, so it’s not feasible to show a savings from the end to one-way attorney fees and other statutory changes.

“The older years receive little weight in the indication since they are low in volume and therefore rendering law change adjustment factor immaterial in the determination of the indicated rate need,” OIR spokesperson Shiloh Elliott said in an email.

The approved TRUE filing shows that OIR actuaries asked for additional information and clarity from the company, but the filing did not provide a narrative from OIR on why the increase was approved.

Company officials could not be reached for comment by Insurance Journal. At the hearing, TRUE CEO Anthony Scavongelli explained that the company had been through some upheaval. TRUE was formed in 2020 as a Florida-only partnership between Orchid Underwriters and American Family’s Homesite Insurance. After Gallatin Point bought a majority stake in 2024, raising more than $1 billion in capital, Scavongelli was asked to take the helm. He is an attorney who previously was with the Massachusetts Department of Insurance and then spent 25 years at Homesite, as vice president, general counsel and chief partnership officer.

The entry into the Florida market came at a tough time, with rising claims costs and soaring reinsurance rates. “But we saw an opportunity to stand out,” Scavongelli said. “After the acquisition, we saw an entirely new management team.”

Last year was eventful, with multiple hurricanes in Florida. TRUE acquitted itself very well after the storms, he said. (Florida OIR quarterly data show that TRUE had 470 claims opened in the last quarter of 2024, 459 of which were closed in that quarter.)

“We also, unfortunately, found ourselves significantly behind in rate adequacy,” the CEO said at the hearing.

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