Florida - Wait a Minute... I have HOW much exposure???

[DW Simpson]

http://www.tallahassee.com/apps/pbcs...62/1010/NEWS01

[Westley]

Originally Posted by D.W. Simpson Webmaster

http://www.tallahassee.com/apps/pbcs...62/1010/NEWS01

I like the part where, in the midst of the sub-prime meltdown, Florida seems tobe concerned that these rating agencies are driving up rates by being too careful.

[JMO Fan]

Citizens can't cope with its promised discounts.

Snafu blocks big discounts from Citizens for home fixesBy RANDY DIAMOND Palm Beach Post Friday, September 21, 2007

A year ago, the Florida Cabinet offered hurricane-weary homeowners a deal that was hard to refuse.

Make your home safer from hurricanes and you'll be eligible for bigger discounts on your homeowners' insurance, the state promised. ...The Cabinet even ordered insurance companies to double the discounts.
...
Implementing the discounts, Citizens officials say, could in some cases wipe out the premiums they collect or even require the insurer to pay policyholders.
...
As a result, Citizens officials decided not to implement the double discount program, leaving more than 180,000 homeowners in Palm Beach County and the Treasure Coast with no way to recoup hundreds or even thousands of dollars in promised discounts for storm-proofing their homes.
...
But officials at the state Office of Insurance Regulation, which oversees the industry, didn't realize there was a problem until about six weeks ago. ... But rather than notify policyholders, Citizens officials simply decided to hold back on doubling the discounts until they could fix the problem.
...
Citizens, however, is a bigger concern because it covers some of the state's oldest, most expensive and most vulnerable properties close to the coast. Moreover, the insurer continues to pile on these properties as other insurers dump them.
...
Last October, complaints from homeowners about meager discounts for major home improvements prompted Gov. Charlie Crist and the Florida Cabinet to order insurers to double mitigation discounts. But the improvements were supposed to benefit insurers as well, because losses would be less in the event of a hurricane.

http://www.palmbeachpost.com/storm/c...ZENS_0921.html

[llcooljabe]

I love the bolded part.

TALLAHASSEE, Fla._Despite a state law passed in January that officials promised would lower property insurance rates, many companies this week have requested to raise rates. Gov. Charlie Crist said, however, that insurance regulators should reject most rate hike proposals.

Insurers faced a Monday deadline for filing proposed property insurance rates based on the new law, which increases access to cheaper backup insurance for the companies. Most insurance companies buy large amounts of backup coverage _ or reinsurance _ to insulate them against big hurricane losses.

But with rates spiraling upward after the busy 2004 and 2005 hurricane seasons, lawmakers this year expanded the state's Hurricane Catastrophe Fund to allow insurers to get more of their backup coverage there; it's cheaper than private coverage. The law says insurers must then pass on those savings to their customers.

State insurance regulators haven't compiled a complete list of all the filings, which have been trickling in over the summer but were due by Monday. But of the filings that have been released, more than 30 call for rate increases, rather than decreases.

Allstate Floridian Insurance Co., for example, is asking regulators for a 41.9 percent rate increase.

Allstate Floridian vice president George Grawe said the company did get cheaper backup coverage from the state's catastrophe fund, but still had to purchase lots of very expensive private reinsurance. He also said the company's customers weren't paying enough before, and the back-to-back blasts of 2004 and 2005 made that clear. After those two years, the company didn't have any capital left.

"The rates that we had before were not adequate," Grawe said. "We had some pent-up rate need. The key here is to make sure you have the money to pay claims."

Among other large insurers, USAA has filed for an increase of more than 50 percent, and Florida Farm Bureau, a roughly 30 percent increase.
Insurance Commissioner Kevin McCarty has already notified several companies that have filed for rate increases of his intent to deny them.
Crist said that's the state's answer to companies that he believes are flouting the new law's requirement _ to deny rate filings.

"He's doing great work, the commissioner is, he keeps rejecting the increases, accepting the decreases on the rates," Crist said of McCarty. "And that's exactly what I think he should be doing."

Sen. Bill Posey, an architect of the law that was expected to bring down property insurance rates, notes that a number of companies have filed for rate decreases. Lawmakers shouldn't be criticized yet for not doing enough because the issue isn't settled, said Posey, R-Rockledge, noting that the companies can't charge higher rates without regulatory approval.

Insurance industry officials also say that some of the expected rate decreases were never agreed on by insurers, and that some of the expectations are unrealistic.

"Some of those numbers are numbers that were promised by politicians making promises; companies didn't make any specific promise," said Gary Landry, vice president of the industry group the Florida Insurance Council.
Landry also said that the requests are just that until the regulatory process plays out.

"That's the purpose of these rate hearings, so that companies will have to present ... their reasons for whatever rate they're filing for," Landry said.

"And if they can justify it _ it needs to be approved."

[tommie frazier]

if he only liked flouting, he'd have said he "loved the bolded and underlined part". read it again. he only singles out the bolded part.

[JMO]

Originally Posted by tommie frazier

if he only liked flouting, he'd have said he "loved the bolded and underlined part". read it again. he only singles out the bolded part.

I actually thought the following paragraph was equally worthy of notice.

[IAm@Work.com]

There are many lines worthy of notice:

TALLAHASSEE, Fla._Despite a state law passed in January that officials promised would lower property insurance rates, many companies this week have requested to raise rates. Proving only that the "officials" are politicians and the companies are profit seekers. Gov. Charlie Crist said, however, that insurance regulators should reject most rate hike proposals. Later he is quoted as implying "all" not "most" increases.

Insurers faced a Monday deadline for filing proposed property insurance rates based on the new law, which increases access to cheaper backup insurance for the companies. Most insurance companies buy large amounts of backup coverage _ or reinsurance _ to insulate them against big hurricane losses.

But with rates spiraling upward after the busy 2004 and 2005 hurricane seasons, lawmakers this year expanded the state's Hurricane Catastrophe Fund to allow insurers to get more of their backup coverage there; it's cheaper than private coverage. The law says insurers must then pass on those savings to their customers.

State insurance regulators haven't compiled a complete list of all the filings which frustrats the heck out of me as a reporter because it means I have to do the leg work., which have been trickling in over the summer but were due by Monday. But of the filings that have been released, more than 30 call for rate increases, rather than decreases.

Allstate Floridian Insurance Co., for example, is asking regulators for a 41.9 percent rate increase.

Allstate Floridian vice president George Grawe said the company did get cheaper backup coverage from the state's catastrophe fund, but still had to purchase lots of very expensive private reinsurance. He also said the company's customers weren't paying enough before, and the back-to-back blasts of 2004 and 2005 made that clear. After those two years, the company didn't have any capital left.

"The rates that we had before were not adequate," Grawe said. "We had some pent-up rate need. The key here is to make sure you have the money to pay claims."

Among other large insurers, USAA has filed for an increase of more than 50 percent, and Florida Farm Bureau, a roughly 30 percent increase.
Insurance Commissioner Kevin McCarty has already notified several companies that have filed for rate increases of his intent to deny them.
Crist said that's the state's answer to companies that he believes are flouting the new law's requirement _ to deny rate filings.

"He's doing great work, the commissioner is, he keeps rejecting the increases, accepting the decreases on the rates," Crist said of McCarty. "And that's exactly what I think he should be doing." I think this, becasue as all uninformed people with respect to insurance, I cannot differentiate between "rates will go down" and "rates will not go up as fast" and "adequate rates will not be has high as without this legislation"

Sen. Bill Posey, an architect of the law that was expected to bring down property insurance rates, notes that a number of companies have filed for rate decreases. Lawmakers shouldn't be criticized yet for not doing enough because the issue isn't settled, said Posey, R-Rockledge, noting that the companies can't charge higher rates without regulatory approval. "I mean come on", he continued off mike, "don't blame us. Blame the insurance department."

Insurance industry officials also say that some of the expected rate decreases were never agreed on by insurers, and that some of the expectations are unrealistic. Only "some" were unrealisitc?

"Some of those numbers are numbers that were promised by politicians making promises; companies didn't make any specific promise," said Gary Landry, vice president of the industry group the Florida Insurance Council.
Landry also said that the requests are just that until the regulatory process plays out.

"That's the purpose of these rate hearings, so that companies will have to present ... their reasons for whatever rate they're filing for," Landry said.

"And if they can justify it _ it needs to be approved, because FL state law requires that insurance rates be 'not inadequate'. I wonder why regulators and legislators and governors keep forgetting that.."

I am reminded of the situation in PA when they changed their no-fault law in c1985. The ISO estimate for the reduction was -15%. (with an assumption with a major flaw, BTW, but still not too far off from reality in the end) Our filing said, "Prior to the law, our rate need is 45%, we estimate the reduction at 12%, so our filing is for 1.45 * .88 = +27.6%."

After some questions from the department, their verbal reaction was, "You are right, you need 27.6% but politically we cannot approve that. We'll approve +10% and no more. File again next year."

At least PA was honest enough to admit what was going on. I'll bet all the increases in FL are rejected without that level of honesty. I hope I am proven wrong. It's a bet I'd love to lose.

[DW Simpson]

http://www.sun-sentinel.com/business...0,210592.story

Business Briefing 1 hour ago

Florida Chief Financial Officer Alex Sink said Tuesday she wants the Florida Cabinet rather than the Legislature to oversee the state's Hurricane Catastrophe Fund that provides backup coverage to insurance companies.

While the move won't mean immediate savings on consumers property insurance policies, a Sink spokeswoman said allowing the governor and the Cabinet members to set rates and limits for the fund would help keep consumers from having to pay extra annual charges on their policies to make up for shortfalls in the catastrophe fund.

Insurance companies tap the catastrophe fund after a major hurricane to help pay damage claims. Sink is working on legislation that she hopes will be considered during a special session on property taxes that could be scheduled for the end of this month.

[JMO]

While they are at it, why don't they also repeal the law of gravity?

[llcooljabe]

Or at least give the cabinet the right to repeal it.