Florida Approves Bill to Raise Property Insurance Rates

Florida Gov. Charlie Crist has said he would sign legislation passed at the eed of the legslative session that increases property insurance rates by 10 percent on more than 1 million customers of the state-backed Citizens Property Insurance Corp.

Crist said that helping Citizens reach actuarial soundness should help stabilize the market, which offsets the rate hike in his view.

Supporters of the legislation (HB 1495) said Citizens customers would have been looking at rate increases between 40 and 55 percent on Jan. 1 if lawmakers had not produced the legislation that allows 10 percent hikes spread over several years.

The bill also reduces the state’s $20 billion exposure on the Florida Hurricane Catastrophe Fund by phasing out the upper levels of a state backup pool by $2 billion a year over a six-year period.

“It’s trying to make sure that we stabilize the insurance market and the viability of Citizens Property,” he said. “I think their incremental approach is prudent.”

“That’s wonderful,” said Sam Miller, executive director of the Florida Insurance Council. “We need to be able to rely on the ‘Cat’ fund again.”

The Office of Insurance Regulation also applauded the legislation. “The need, obviously, is there for Citizens to increase its rates,” OIR spokesman Ed Domansky said. “It’s important that Citizens’ rates reflect actuarial soundness to better ensure its customers that claims will be paid.”