Florida Insurance Commissioner Kevin McCarty said today he is denying a Nationwide Insurance Company of Florida rate increase request that would hit some homeowners with hikes of up to 400 percent.
The regulator announced that he issued notice of intent to deny Nationwide's application for an increase in residential property insurance rates by a statewide average of 71.5 percent.
Mr. McCarty said his office has been inundated with rate hike requests from home insurers in the wake of heavy losses inflicted by the 2005 hurricane season.
Nationwide filed the new rates on July 6, to become effective for new and renewal business Nov. 10.
Mr. McCarty said the primary reason the company cited for the increase was higher reinsurance costs for non-Florida Hurricane Catastrophe Fund reinsurance. He said the Florida Office of Insurance Regulation had found there was not sufficient support in the filing to justify the request.
In an environment where "many Floridians are being forced to make painful economic choices to deal with rising insurance premiums," Mr. McCarty said, "insurers must redouble efforts to fully and completely support all requests for increased rates…" In Nationwide's case, providing data to support the rate hike "has absolutely not been done," said Mr. McCarty. He added that the rate filing "contains proposed hurricane rate hikes in excess of 300 and 400 percent for some territories which are entirely unsustainable."
According to filings with the state, Nationwide has more than 253,000 policies statewide in Florida. The five counties with the greatest number of policyholders are Palm Beach with 29,177, Pinellas with 21,558, Orange with 16,298, Hillsborough with 14,307, and Broward with 13,459.
Mr. McCarty has announced rejection of insurers' requests for big jumps in residential property rates with regularity.
When State Farm Floridian Insurance Company, which is the largest private admitted carrier in the state with 852,000 home insureds, sought a 79 percent average statewide increase, he turned them down. Eventually, on July 18, State Farm was granted a 52.7 percent statewide average increase.
Florida law requires that the office hold public hearings on rate filings for statewide average increases exceeding 15 percent when a private model is used or for any purpose seen as necessary by the office.
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