13 March 2015 Insurance

Florida regulator eliminates Citizens assessments early

The Florida Office of Insurance Regulation has eliminated the last of a series of emergency assessments on property insurance policyholders in Florida early.

The assessments, which were used to pay off claims from the eight hurricanes of 2004-2005, have been eliminated two years ahead of schedule, due to an early payoff of the bond used to pay the claims.

The office today issued an order to the Citizens Property Insurance Corporation terminating a 1 percent emergency assessment on premiums of generally all property insurance policyholders, including Citizens policyholders.

The $1.38 billion collected was used to pay claims Citizens incurred from the 2004-2005 hurricanes that struck Florida.

“Citizens reports it expects to enter the 2015 hurricane season with more than $4 billion in reinsurance coverage and about $7.5 billion in surplus available to pay future claims – the highest in its history,” said Florida Insurance Commissioner Kevin McCarty.

“That’s important, because Citizens can assess surcharges on all property insurance policies in Florida to cover any shortfalls that may occur in future hurricanes. A higher surplus, too, means that more claims can be paid from cash rather than relying as heavily on assessments.”

Commissioner McCarty said another key to protecting Florida insurance consumers is the continued depopulation of Citizens.

“The Office has increased the number of Citizens policies authorised for take-out by private companies, lessening the risk for all insurance consumers of paying post-hurricane Citizens assessments. Citizens went from a high of 1.48 million policies in 2012 to 661,161 policies by the end of 2014 – an eleven year low,” said McCarty.

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