Tallahassee (News Service Florida)
The head of state-owned Citizens Property Insurance Corp. points out the “sea of red ink” and private insurance is losing a lump of gold while homeowners are soaring and struggling to find coverage. I explained the industry.
“The consistency of losses across the market is absolutely incredible,” Citizen’s President and CEO Barry Gilway told the Home Insurance & Banking Subcommittee. “It’s not a decision made by one or two companies. In reality, what’s happening in the market affects every company in the market.”
Gilway appeared in front of the panel less than six months after legislators passed steps to strengthen the property insurance system (SB 76). However, as evidence of ongoing problems, the number of policies written by citizens has skyrocketed to over 700,000 and is expected to exceed one million next year as homeowners seek compensation.
Gilway’s presentation focused on the financial issues of the insurance industry, but D-Wellington Rep. Matt Willit cites disabled veterans who were hit by a significant rate hike and impacted homeowners. I asked about.
“If disabled veterans holding bonds cannot insure their homes when they are at the limit, where is the limit?” Wilhite asked.
The meeting on Wednesday did not include a detailed discussion of suggestions for addressing the issue, as lawmakers are preparing to launch the 2022 legislative meeting in January. As an example of one idea, R-Miramar Rep. Tom Fabricio could open the market more widely to what is known as a surplus line carrier, not facing the same regulatory oversight as more traditional insurers. Was highlighted.
However, House Minority co-leader Evan Jenne of D-Dania Beach pointed out many changes in the real estate insurance system over the last two decades and questioned whether the state needed a new approach.
“Should we move in a completely different direction?” Jenne asked. “What we are trying to do is that much of it is built on each other. Still, we continue to find the same results and find ourselves in these awkward situations. Something new. Should I see? “
Citizens were originally founded as a last resort insurance company, but have grown significantly since mid-2020 as private insurance companies have raised rates and lowered policies in an attempt to stop economic losses.
According to data posted on the website, citizens added about 22,000 policies last month and had 708,919 policies as of September 30. With a total of 511,055 policies on September 30, 2020, it has acquired nearly 200,000 policies, and Gilway recently stated that its initial forecast for 2022 will include between 1 and 1.3 million policies. ..
Many lawmakers and state leaders have long sought to move homeowners from citizens to the private market, primarily because of concerns about the financial risks of taxpayers in the event of a major hurricane in Florida. I’ve been doing it.
However, in addition to reducing the amount of coverage that private insurance companies write due to financial problems, Gilway said citizens often have lower rates than private companies. In addition, many homeowners in areas such as southeastern Florida rely on their citizens because they have few other coverage options.
The law passed in April took a series of steps, including helping curb lawsuits against insurance companies and gradually raising the cap on rate hikes for citizens’ customers.
However, one of the key parts of the bill designed to prevent contractors from asking homeowners to file roof damage claims was by federal judges due to concerns about the First Amendment. It was blocked. Insurance companies claim they are facing soaring costs due to claims for unnecessary, if not fraudulent, roof damage.
In a way, Gilway’s comment on Wednesday echoed state insurance commissioner David Altmaier, who told the Senate last month that the real estate insurance market was “disastrous.”
Gilway, who has been in the insurance business for 51 years, used graphics to show legislators that dozens of private insurance companies have suffered net income losses in recent years. Among the factors he cited were legal costs and reinsurance costs. This is essentially insurance that the insurance company buys as a backup.
In addition, Gilway said the 2020 Insurance Regulatory Authority received 105 tax returns from insurance companies seeking a 10% or higher increase. According to the information provided by Gilway, customers of some companies have seen price increases of more than 25% in 2020 and 2021.
Gilway said the situation was not “sustainable.”
“It’s unacceptable for Floridians to face tremendous growth rates,” he said.
Citizen Insurance Chief details problematic industries
Source link Citizen Insurance Chief details problematic industries