Insurance Concerns on Fla. Agenda

The Florida Legislature is considering numerous actions during spring sessions, including taking a close look at preparedness for the upcoming hurricane season, now five months away; implementing single-deductibles; bringing Citizens Property Insurance Company under control, by passing as many of its policyholders as possible on to other private insurers; and a bill to require training and licensing for mold professionals.

A Joint Legislative Com-mittee is exploring if an annual hurricane deductible should be optional and if insurers should offer a range of specific hurricane deductible amounts or percentages.

William Stander, regional manager of the Property Casualty Insurers Association of America urged lawmakers to allow time for reforms made to hurricane deductibles to work before making more changes.

“The Joint Committee is charged with studying aspects of the residential insurance market in light of the approximately $20 billion in losses from the 2004 hurricanes,” Stander explained.

One suggestion was to reduce a home’s deductible to 1 percent, instead of the customary 2 percent. The ideas met with strong warnings from insurance company representatives that the money will have to come from somewhere. American Insurance Association lobbyist, Gerald Wester, said that lowering the policyholder’s share of repair costs to 1 percent could increase a company’s probable losses by almost 15 percent.

Florida legislation states that as of May 1 residential policyholders will have one annual hurricane deductible to cover multiple events, once the deductible is exhausted, losses from any additional hurricanes will be subject to the “all other perils” deductible, typically $500.

“This is a critical issue for residential insurers as pricing algorithms are based on an occurrence deductible,” AIR Worldwide Corp. spokesman Michael Gannon said. “Insurers need to quickly assess the law’s impact on their portfolios and give the state notice of price adjustments before its May 1 implementation.”

AIR has prepared a white paper listing techniques to analyze and prepare for multiple-event and multiple-peril seasons. It adapted its hurricane model to help insurers with their assessments by accounting for Florida’s annual deductible.

The white paper illustrates how AIR systems determine the probability that some or all of those events exceed a company’s retention. It concludes with examples of how companies can ensure they have adequate reinsurance protection, both from single large losses and from multiple losses in a single year. AIR has also incorporated the changes into its catastrophe modeling software to make it easy for clients to analyze the impact of deductible changes on insurer portfolios.

Poe takes over 4,500 Citizens policies
Poe Financial Group member company Atlantic Preferred Insurance Company has received regulatory approval to assume 4,500 Citizens property and casualty policies.

Even after Florida’s unprecedented four-storm season, Poe Financial has remained resilient. Of more than 40,000 reported claims better than 92 percent are paid and the company ended its fiscal year with a record $500 million in written premium. Poe Financial Group’s member companies are Atlantic Preferred Insurance Company, Florida Preferred Property Insurance Company and Southern Family Insurance Company.

Philadelphia Consolidated targets Fla.
Philadelphia Consolidated Holding Corp.’s personal lines division, Liberty American Insurance Group, is accepting new applications for its homeowners, condominium and rental dwelling products in Florida.

Liberty suspended accepting all new business applications Aug. 12 due to Hurricane Charley. To date, settlement payments have been issued for approximately 95 percent of these claims and the division is now directing its attention to new business.

Philadelphia Consolidated will also expand its writings in other states through its subsidiary, Mobile USA Insurance Co.

Error in Citizens rate-hike report
Although information filed by Citizens with Florida regulators to request rate increases was correct, information provided to the public and media was incorrect, according to Justin Glover, Citizens spokesman. Glover told the Fort Myers News-Press that insurance rate increases in Lee County won’t be as high as the state-run insurance company announced. He said a cut-and-paste error was made.

The corrected figures make the bad news better for Lee County customers. Glover said that wind-only insurance in Lee County will increase 10.1 percent, a far cry from the 45 to 60 percent figure cited in its previous report. Some coastal and barrier island customers will see no increase, or a 2.5 percent hike.

The increase in Collier County is lower than reported, too. The rate increase of 14.6 percent that will start in April is somewhat lower than the previously announced 19.8 percent rate.

The error was only on wind-only policy information, Glover said. The statewide average increase for wind-only policies on dwellings is 12.2 percent, 9 percent for condominium policies and 3 percent for mobile homes. And the statewide average increase on Citizens’ homeowner policies is 23.4 percent.

Fla. HB 117 to license mold professionals
Legislation that would require training, certification and licensing for Florida mold professionals has been filed by Rep. Carl J. Domino, R-West Palm Beach, and co-sponsored by Rep. Franklin Sands, D-Weston. HB 117 is waiting for committee references from the House speaker’s office to be considered in the 2005 legislative session.

“Right now you and I could call ourselves mold remediators and hang out a shingle,” Domino explained. “The issue has just become too important to people’s lives to allow for confusion or fraud.”

HB 117’s education and examination requirements have been adopted from national industry organizations with voluntary certification for members, such as the American Indoor Quality Association. It allows private entities to offer the certification and training requirements. It also adds a seat for a licensed mold professional to the Florida Construction Industry Licensing Board within the Department of Business and Professional Regulation.

Topics Florida Catastrophe Carriers Legislation Hurricane Training Development