Florida regulators have approved an overall statewidehomeowners' insurance rate increase of 6.3 percent for the state'slast resort insurer.
Citizens Property Insurance Corp. can use the new rates on Jan.1, 2014 for new and renewed homeowners policies and Feb. 1 nextyear for coastal accounts, according to the state Office ofInsurance Regulation.
|The largest rate hikes, about 10 percent, will be seen in SouthFlorida and along the coast.
|The state-run insurer's CEO, Barry Gilway (pictured), saysCitizens is "pleased that [the OIR] has agreed with our overallapproach."
|"The agency's action will allow Citizens to continue providingquality service to our 1.2 million policyholders while reducing therisk of assessments on all Floridians," Gilways continues, in astatement.
|Citizens has the ability to assess Florida policyholders shouldthe insurer need money to pay claims following a catastrophicevent.
|The largest provider of property insurance in the state—adistinction Citizens was never meant to have—originally asked theOIR for an average rate increase on homeowners policies of 6.6percent and an overall average statewide rate increase of 7.5percent on all accounts.
|Citizens has been working to get to actuarially sound ratesfollowing years of mandated rate suppression. Citizens became thelow-cost option for homeowners, which bloated its policy count andexposure to risk, which has also been reduced recently bydepopulation efforts. A group of private insurers have beenapproved to take policies from Citizens' books.
|Several years ago lawmakers put Citizens on a "glide path" toactuarially sound rates by allowing the insurer to increase ratesno more than 10 percent per policyholder. At a rate hearing inAugust Gilway said the plan is working. In 2011 Citizens needed arate increase of 56 percent to achieve actuarially soundness. In2014 Citizens would need an 18.3 percent hike to achieve thesame.
|ALSO READ: FloridaCitizens Property Corp. Makes Case for 7.5% RateHike | FloridaCitizens CEO: 'We've Never Been in Better Shape'
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