NU Online News Service, Oct. 30, 3:40 p.m. EDT
Homeowners insurance rates for Citizens Property Insurance Corp., Florida's insurer of last resort, will rise an average of 5.4 percent, the state's Office of Insurance Regulation announced.
Insurance Commissioner Kevin McCarty yesterday signed an order establishing Citizens' rates for some lines of business, including homeowners insurance.
Earlier this year, the Florida legislature passed HB 1495, which allowed a 10 percent per policy increase to Citizens policies. Senator Garrett Richter, R-Naples, the bill's sponsor, said at the time that Citizens' premiums are not adequate to cover potential losses in the event of a major hurricane.
He noted that a task force formed to review Citizens determined a 20 percent increase per-policy ceiling would be necessary to get rates to an actuarially sound position.
The House had initially passed a 20 percent ceiling in its version of the bill, and the Senate passed a 5 percent ceiling. The two sides then negotiated to 10 percent.
But Gary Landry, vice president of the Florida Insurance Council, said there has been some controversy over whether the legislature meant rates should go up the full 10 percent for as long as it takes for them to be actuarially sound, or, "as has been interpreted, some Citizens policyholders will see rates rise no more than 10 percent while others see rates fall."
Mr. Landry said the legislature may want to take the issue up again in 2010 to clarify its intentions, but he also said, "The important thing here is the acknowledgement that rates need to adequately reflect the risk, and it's important that they are moving toward that direction."
Other Citizens rate increases, according to the OIR, include an 8.8 percent increase for dwelling fire, 1.7 for mobile homeowners, 2.1 percent for mobile home physical damage, and 10.2 percent for commercial property residential-condo associations.
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