Florida regulators have approved an overall statewide homeowners' insurance rate increase of 6.3 percent for the state's last resort insurer.

Citizens Property Insurance Corp. can use the new rates on Jan. 1, 2014 for new and renewed homeowners policies and Feb. 1 next year for coastal accounts, according to the state Office of Insurance Regulation.

The largest rate hikes, about 10 percent, will be seen in South Florida and along the coast.

The state-run insurer's CEO, Barry Gilway (pictured), says Citizens is "pleased that [the OIR] has agreed with our overall approach."

"The agency's action will allow Citizens to continue providing quality service to our 1.2 million policyholders while reducing the risk of assessments on all Floridians," Gilways continues, in a statement.

Citizens has the ability to assess Florida policyholders should the insurer need money to pay claims following a catastrophic event.

The largest provider of property insurance in the state—a distinction Citizens was never meant to have—originally asked the OIR for an average rate increase on homeowners policies of 6.6 percent and an overall average statewide rate increase of 7.5 percent on all accounts.

Citizens has been working to get to actuarially sound rates following years of mandated rate suppression. Citizens became the low-cost option for homeowners, which bloated its policy count and exposure to risk, which has also been reduced recently by depopulation efforts. A group of private insurers have been approved to take policies from Citizens' books.

Several years ago lawmakers put Citizens on a "glide path" to actuarially sound rates by allowing the insurer to increase rates no more than 10 percent per policyholder. At a rate hearing in August Gilway said the plan is working. In 2011 Citizens needed a rate increase of 56 percent to achieve actuarially soundness. In 2014 Citizens would need an 18.3 percent hike to achieve the same.

ALSO READ: Florida Citizens Property Corp. Makes Case for 7.5% Rate Hike | Florida Citizens CEO: 'We've Never Been in Better Shape'

Special Reports /

Florida OIR Approves 6.3% HO Rate Increase for Last-Resort Insurer

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