Florida Governor Signs Citizens Insurance 10% Rate Hike Bill Into Law

Florida Gov. Charlie Crist has signed legislation that will increase property insurance rates by 10 percent annually on more than one million customers of the state-backed Citizens Property Insurance Corp. and gradually reduce the exposure of the state’s hurricane insurance fund.

Crist signed the bill (H.B. 1495) without any public comment.

Supporters of the legislation had warned that Citizens’ customers could have faced rate increases of more that 40 percent on Jan. 1 if lawmakers didn’t allow the smaller hikes in Citizens’ rates, which have been frozen for several years.

The legislation implements a so-called rate “glide path” capped at 10 percent until Citizens’ rates are actuarially sound.

The bill also reduces the state’s $20 billion exposure in the Florida Hurricane Catastrophe Fund by phasing out the upper levels by $2 billion a year over six ears.

Other provisions of the legislation deal with how the state handles insurer rate filings; prohibit public adjusters from accepting referrals of business from any person with whom the public adjuster conducts business; and allow insurance agents to discuss the state’s back-up guaranty insurance fund that covers claims for insolvent insurers to consumers.