Office Issues Notice of Intent to Disapprove Praetorian Insurance Company's Rate Filing for Lender-Placed Insurance
TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced the Office of Insurance Regulation (Office) has issued a Notice of Intent to Disapprove the May 4, 2012 rate filing submitted by Praetorian Insurance Company (Praetorian).
Praetorian requested a proposed statewide decrease of 2.2 percent in the rate filing for its property collateral protection program, also known as “lender-placed” or “force-placed” insurance. This form of insurance is imposed by lenders on those who fail to secure homeowners’ insurance for their property as required by the mortgage or lending document.
The Office’s indications demonstrated a reduction of 35-36% was required.
"The Praetorian filing was meticulously reviewed and all testimony given by company representatives at the July 3rd public hearing carefully considered," said Deputy Commissioner of Property and Casualty, Richard Koon. "Praetorian did not provide appropriate support for the rate decrease it requested."
The key reasons cited in the Notice of Intent to Disapprove broadly references the following as not being in compliance with Section 627.062, Florida Statutes: excessive rates, insufficient support for the loss trend selected, and indicated expenses and reinsurance cost reflecting allocation of costs to Florida were excessive relative to services rendered.
The decision to deny the rate decrease followed a public hearing in which a panel of representatives from the Office questioned various aspects of the rate filing. Video of the hearing and testimony provided by presenters are available on the Office’s website. Praetorian has 21 days, if it chooses, to petition the Office for an administrative hearing or Praetorian may submit a new filing to the Office.
As the President of the National Association of Insurance Commissioners (NAIC), Commissioner McCarty attended a hearing on lender-placed insurance in Atlanta, GA on August 9th to hear testimony from insurers and other interested parties about this issue.