News from Tallahassee for 12/20/14

Guest houses back in, storm taxes fading out at insurer Citizens posted on 12/11/14

by charles elmore | palm beach post

The guest house, wiped off the guest list for coverage at Florida’s largest insurer almost three years ago, is welcome again.

State-run Citizens Property Insurance Corp. is restoring optional coverage to detached structures like guest houses, garages and workshops in a move its board approved Wednesday.

Citizens also aims to have enough financial protection in 2015 to avoid billing customers to bail it out after a once-a-century storm, which executives called a milestone goal.

The actions reflect a smaller Citizens, about half its 1.5 million-policy size a few years ago.

In 2012, Citizens sharply reduced coverage of outbuildings in a bid to reduce its risk exposure. It was part of a larger drive to push customers into the arms of private carriers.

But stand-alone coverage for such structures “is not generally available in the private market,” Chief Risk Officer John Rollins acknowledged at a board meeting Wednesday. So customers who remained in Citizens had little recourse.

The nine-member Citizens board decided to let customers have the option of insuring guest houses and other detached buildings up to 50 percent of the value of the main house. The coverage will be available “at the insured’s request.”

Citizens is planning to end assessments to its customers and those of other insurers to pay debt from 2004-05 storms during 2015, a bit ahead of the original schedule. That takes a 1 percent charge off bills.

On Wednesday, Citizens President Barry Gilway said the insurer is on track to avoid new “storm taxes” even if a 1-in-100-year storm hits in 2015.

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Citizens Property Insurance revamps criticized program posted on 12/10/14

by jeff harrington | tampa bay times

Reacting to harsh criticism, Citizens Property Insurance is revamping the way it pushes homeowners policies into the private market.

The move comes a month after a Tampa Bay Times article detailed consumer complaints over how state-run Citizens was letting private insurers take policies out. Under the program, policyholders who are selected for a "takeout" have to fill out a form to opt out or their policy is automatically shifted to a new company.

Since January, more than 300,000 Citizens policyholders have been shifted to other carriers, a groundswell that state leaders applaud for decreasing financial risk statewide. Under state law, all Floridians with insurance are at risk of being assessed if a cumbersome Citizens Property is swamped by claims after a major hurricane that it cannot afford to pay.

However, the takeout program triggered numerous complaints.

"We've heard some concerns, and they have not fallen on deaf ears," said Steve Bitar, Citizens' vice president of consumer and agent services. "We hear you and are making a slate of changes that we think will alleviate much of the confusion."

Among issues cited in the Times story, some customers either never received the initial takeout offer from the company or it was assumed to be junk mail, so their policies were automatically switched. Also, a Citizens' followup "encouragement" letter to homeowners did not include an opt-out form and that form was hard to locate on Citizens' website. And customers complained Citizens' language exaggerated the potentially dire financial consequences to resist switching.

In some cases, Citizens policyholders who never wanted to leave were subsequently shocked to find huge premium jumps upon renewing with their new carriers.

Some policyholders found it deceptive for Citizens to underplay its own financial security in the letters, when it is sitting on more than a $7 billion surplus after nine hurricane-free years. At the same time, the company gave only cursory information about the financial viability of the carriers taking out policies. A recurring complaint among policyholders is that some of the fledgling Florida-based carriers are untested and, at least based on one ratings firm, are financially weak.

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State insurer Citizens shrinks to smallest size since 2005 posted on 12/3/14

by charles elmore | palm beach post

citizen's property insurance logoAfter Sunday’s close of a ninth straight hurricane-free season, state-run Citizens Property Insurance Corp. said it has slimmed down to 727,000 customers, a drop of 27 percent since the start of the year.

That is the insurer’s smallest size since 2005, the last time a hurricane (Wilma) scored a direct hit on Florida, a spokesman said Tuesday.

Along with fewer customers comes $85.6 billion in less risk exposure since the start of the year, officials said.

Most of the customers are going to small, Florida-based companies through transfer offers that come as letters in the mail. A smaller number have been steered to comparably priced private competitors through a clearinghouse, a computer system used by agents, that is new in 2014.

Some of the downsizing programs have contributed to more than 4,000 complaints since the start of last year, records show, but years of annual premium increases up to a 10 percent state cap have brought the company’s prices close to what it considers adequate for most customers, even resulting in a rate cuts for many in 2015. In turn, private insurers have found the prices attractive enough to try to grab more Citizens customers.

“Citizens already is looking ahead to 2015, capitalizing on the growing strength and vibrancy of Florida’s private insurance market to increase consumer access to private-market insurance options,” said Citizens president Barry Gilway in a statement. “The success of these programs, along with favorable pricing in the international reinsurance markets, put Citizens on an even stronger financial footing heading into 2015.”

Some 335,692 policies have been removed or are in the process of being removed from Citizens in 2014. This represents a 6.5 percent increase over 2013 takeouts during the same period, officials said.

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Florida Insurance Commissioner Orders Workers' Compensation Rates To Drop posted on 11/7/14

by JESSICA PALOMBO | WFSU

Florida’s small businesses should see their workers’ compensation rates drop at the beginning of next year. State Insurance Commissioner Kevin McCarty has ordered an average premium reduction of 5.2 percent. That’s a deeper cut than the 2.5 percent insurers originally requested.

Taylor Gibson manages the Tallahassee branch of Two Men and a Truck moving company. He says the cuts will take a burden off businesses.

“This is a part that’s out of our control," he says, "whether we have safety plans in place, whether we have safety programs, whether we have training for every guy, this is still something that’s out of our control that is being changed that can help us financially have the best kind of support for when claims do arise.”

Gibson says workers comp rates are so high that employers often pay small doctor’s bills out of pocket instead of filing full claims. Rates have increased in Florida for each of the last three years. The new lower rate is expected to go into effect in January, barring an administrative challenge by the insurance industry.

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FL 28th in Workers’ Comp Rates posted on 10/28/14

by staff | Health NEws Florida

Florida ranks 28th in the nation for workers’ compensation premium rates, according to The Workers' Compensation Premium Rate Ranking Summary from Oregon’s Department of Consumer and Business Services.

The report reveals that Florida businesses spend $1.82 for every $100 of payroll on workers’ compensation expenses. California has the highest premium rates at $3.48 per $100 of payroll and North Dakota has the lowest at just 88 cents per $100 of payroll, according to the summary.

» Read more

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