Originally published by Florida Politics | View Story
By Christine Sexton
The state is keeping an 'extra close eye on' one or two companies.
Florida’s top insurance regulator on Wednesday gave a bleak assessment of the state’s property insurance market, saying it was “dire,” and acknowledging consumers will likely continue to see rate hikes.
Florida insurers are reporting heavier losses in 2021 than last year, and Insurance Commissioner David Altmaier told state legislators that his office was currently monitoring several insurance companies to ensure they remain solvent and that as many as 12 companies are being asked to submit monthly financial statements just to make sure they are still functioning.
“The results are dire and this is cause for concern,” Altmaier said.
He also told legislators that even with a recently enacted bill designed to cut down on legal costs burdening insurers, he could not guarantee a time when rate hikes won’t continue to be needed. Florida has the third highest property insurance rates in the nation.
“There’s no quick fix to this,” Altmaier said. “It’s going to be a painful period of time for our marketplace and for consumers.” While state regulators are publicly expressing fear about the finances of private carriers, the state-created insurer of last resort, Citizens Property Insurance, announced that it will have more than 1 million policyholders in the coming year, a sign that years of shrinking Citizens has been almost completely reversed.
Following seven hurricanes that hit the state in 2004 and 2005, state legislators set aside hundreds of millions to help offset losses.
If Florida’s insurance market does not stabilize it could send ripple effects through the state’s economy in the months ahead.
Sen. Jim Boyd, the chairman of the Senate Banking and Insurance Committee, asked the commissioner whether more companies are expected to fold in the coming months.
“Are there some on the radar that we are concerned about in terms of their ability to continue on in this market?” Boyd asked. “Are there some that could fail or not depending on what happens over the next year or so?”
Altmaier told Boyd the Office of Insurance Regulation has a “fairly large list” of companies his office is tracking. But the commissioner stressed the list isn’t of companies regulators believe will fail in the next six to eight months. Given the tough insurance environment at the moment, Altmaier said, the office is trying to proactively analyze the companies as a way to protect Florida customers.
“We view our role in markets like this as being able to identify companies that aren’t going to make it as early as we possibly can so we can start to move policyholders into a company that can provide them coverage with as minimal disruption as possible,” Altmaier said. But he did concede there “are probably one or or two companies we are keeping an extra close eye on.”
Legislators passed a comprehensive insurance bill during the 2021 Session that shortened the time homeowners could file claims, placed limits on types of advertising by roofing contractors and made changes to how attorney fees are paid in property insurance disputes.
Altmaier told legislators it’s still too early to see what kind of impact the legislation — which took effect this summer — will have on the market. A federal judge in July blocked the part of the law that prohibited roofing contractors from doing certain types of advertisements.
Boyd said it is likely that legislators will try to come up with some sort of bill to deal with outstanding problems in the property insurance market during the upcoming 2022 Session