The Florida Office of Insurance Regulation announced yesterdaythat it has further expanded the activities of the state's insurerof last resort, Citizens Property Insurance Corp., by approving anew multiperil commercial nonresidential insurance program.

Action by the OIR follows authorization earlier this year by theFlorida Legislature for Citizens to assume the policies of theProperty and Casualty Joint Underwriting Association and to createa plan to offer commercial insurance to businesses.

"Adding Citizens to the mix of companies writing commercialmultiperil insurance is good for the competitive market," saidInsurance Commissioner Kevin McCarty.

Mr. McCarty said the move is "an important step, because it isthe company's first coverage offering away from what had been itsmain niche of offering homeowners insurance statewide andcommercial wind-only insurance only in the high-risk areas of thestate."

Citizens completed two parts of a three-part plan by June: Itassumed the policyholders of the Joint Underwriting Authority, andthen it began to sell its temporary wind-only policy for businessesthat are not located in the high-risk or "wind pool" area.

The third part of the plan was to develop a comprehensiveprogram offering multiperil property coverage for businessesstatewide.

Citizens filed its forms and rates in September to accomplishthe plan's third step.

OIR said the new multiperil product provides up to $2.5 millionin coverage. The policies will cover damage from wind as well asfire and other perils traditionally included in a commercialproperty insurance policy. OIR said it has approved the policyforms and rates for Citizens to proceed with its program no laterthan Jan. 1, 2008.

As Citizens begins selling its new commercial multiperil policystatewide, OIR said the insurer has been ordered to stop sellingits wind-only policies--business it had assumed from the PCJUA--inareas of the state outside the high-risk coastal areas. Citizensstill offers wind-only coverage in the coastal "wind pool"area.

The OIR also approved a 15 percent rate increase for commercialwind-only policies. Effective Jan. 1, 2008 the increase will bringthe cost of Citizens' wind coverage closer to the cost of the windportion of the coverage offered by private insurers in the rest ofthe state.

"Although no one likes to see a rate increase in our state'scurrent insurance climate," Mr. McCarty said, "Citizens needsadditional rates in order to better ensure its ability to paycommercial claims. I remain committed to doing everything within mypower to bring property insurance rates under control and to ensurethat Florida consumers are being offered the savings expected as aresult of the law passed during January's special session."

OIR said it has also ordered Citizens to make a rate filing forits commercial program every year so that any rate increases thatare necessary in the future can be done in smaller increments tomake them more affordable to policyholders.

In 2004 OIR issued an order requiring Citizens to file for newrates; however, OIR said it was not until the Florida Legislaturepassed legislation requiring Citizens to be more accountable forits actions that it was successful in getting the insurer to seek anecessary rate increase.

OIR noted that Gov. Charlie Crist and his cabinet had waged a"Citizens for a Better Citizens" campaign, which included meetingsaround the state that sought input from Floridians.