Florida reforms taking root; litigation veers down at Citizens
Florida may be turning the corner on its insurance market agony, with recent tort reforms driving down litigation counts while heating up the depopulation programme for state insurer Citizens, the company's top official has claimed.
“Things are going well; the market has bounced back,” Timothy Cerio, CEO of Citizens Property Insurance Corporation, told a board of governors meeting of his firm.
“There is ample evidence that the reforms are working,” Cerio said.
Citizens’ own litigation case counts are down following reforms and despite an increase in policies in force, he noted.
Citizens’ own new non-catastrophe litigated cases filed through July this year is down 20% compared to last year, Cerio claimed.
And the firm’s own depopulation programme is now running well ahead of plan, leading to a massive reduction in the forecast for policies in force likely at the end-2023.
Citizens expects to end the year with roughly 1.2 million policyholders, down from an initial estimate of 1.7 million, materials prepared for the board meeting indicated.
The broader market is also showing signs of life, Cerio noted in presenting the argument that reforms were making an impact, citing regulatory approval for 6 new property insurance companies on the market in 2023.
Faced with floods of court claims, Florida legislators moved at a special legislative session in December 2022 to eliminate Florida's one-way attorney fee provisions on property insurance suits and along with rules allowing assignment of benefits. Follow up legislation in early 2023 took a broader shot at tort law.
Those former legal provisions, critics claimed, had enabled an alliance of lawyers and contractors to flood the courts on their own without risk of legal fees for losses. Florida ended up with an overwhelming majority of the nation’s lawsuits on a small minority of the nation’s claims, critics claimed.
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