Citizens Rate Hike Remains Under Review Beyond Deadline
The Florida Office of Insurance Regulation continued calculating into the night numbers on the sinkhole rate hike proposal from Citizens Property Insurance Corp.
Officials with the state agency bypassed their own deadline, even postponing a scheduled late-Monday-afternoon conference call, as a spokeswoman said the final totals had yet to be completed on the rate request that would average 428 percent statewide.
State insurance regulators had been deluged last Tuesday in Tampa by angry residents and state legislators regarding the rate request, and announced they would make a decision by Sept. 19 on the requested spike by the state-backed property insurer that had a high of 2,226.1 percent in Orange County.
During the meeting, which was streamed live on The Florida Channel, Insurance Commissioner Kevin M. McCarty called the public comments "enlightening."
We talked about some pent-up need, but we also see there is some great deal of anxiety on the consumers, particularly in West Florida, McCarty said. We have high unemployment, people who are underemployed. We have people struggling every day to make ends meet. Some of the rate increases are simply not viable.
The night before the Tampa meeting, Citizens board members tried to temper some of the growing anger by agreeing to cap the proposed hike at 50 percent in the coming year, seeking the additional increase in following years.
Citizens' officials claim the rate increases are needed because current premiums dont cover payouts for sinkhole claims.
John Rollins, an expert witness for Citizens before the insurance regulators, backed the numbers from the insurance provider, established as the insurance company of last resort in 2002.
In 2010, sinkhole coverage brought in $32 million to Citizens, while sinkhole claims required nearly $250 million in payouts.
Some of the largest sinkhole premium increases are proposed for the Tampa Bay area, which has the largest percentages of Citizens coverage in relation to other insurance providers.
Overall, Citizens is seeking a 12.1 percent statewide average rate increase for coastal accounts and 25.4 percent for others.
Sen. Mike Fasano, R-New Port Richey, gave an impassioned plea for senior citizens and young families during last week's hearing. He said many in the Tampa area face upside-down mortgages and the increase will be a devastating hit if approved, even if the increase is phased in over a number of years, as was proposed Monday.
Shame on Citizens, Fasano said. A 50 percent (rate hike) in Pasco County means a $1,000 increase. A 50 percent (rate hike) in Hernando County means a $1,200 increase. That is absolutely unaffordable to people in the Tampa Bay area.
He said the housing market in the Tampa Bay region will be further damaged as many residents drop sinkhole coverage.
Fasano opposed the approval of SB 408 in the 2011 legislative session, which lifted a 10 percent cap on the maximum rate sinkhole premiums could be increased.
Potential rate increases for all other Citizens policies remain capped at 10 percent this year.
Residents said the sinkhole coverage will skyrocket foreclosures in areas such as Pasco, Pinellas, Hillsborough, and Hernando counties.
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