The board governing Florida’s insurer-of-last-resort, Citizens Property Insurance Corp., has voted to endorse a set of legislative changes that would allow the state-run entity to raise rates and gradually depopulate some of its 1.5 million policyholders.
“I’m the first to acknowledge that it is time for us to contract and there is political pressure for us to contract,” Citizens Chairman Carlos Lacasa said, according to the Associated Press.
Among the changes now sought by the insurer are provisions that would allow it to raise rates by more than the current cap of 10% a year and to bar homeowners from being eligible for a Citizens policy unless they can demonstrate a private company would charge rates more than 25% higher.
Gov. Rick Scott is backing efforts to shrink the size of Citizens, and other plans are also on the table for the next legislative session. One idea – introduced as S.B. 578 by Sen. Garrett Richter, R-Naples, and H.B. 245 by Rep. Jim Boyd, R-Bradenton, would allow surplus lines insurers to compete to draw customers away from Citizens.
Alas, the AP warns:
Some GOP legislators have already signaled that they are not anxious to consider any major property insurance changes during 2012. The Florida Legislature approved a comprehensive property insurance bill earlier this year only to see it trigger protests when Citizens tried to enact large rate hikes for sinkhole coverage.
Which makes it somewhat heartening that Citizens also has been pursuing changes that might not require approval from Tallahassee, including potentially imposing a 10% deductible on sinkhole claims. Having already cut off coverage for external structures Citizens also is now raising rates for commercial residential multi-peril policies by 19% on average and 20.6% in parts of Broward, Miami-Dade, Palm Beach, Indiana River and Saint Lucie counties.
