Office Of Insurance Regulation Holds Hearing On Monroe County Rate Request In Key West
TALLAHASSEE (8/3/2006) – The Florida Office of Insurance Regulation has completed a public rate hearing in Key West on a request by Citizens Property Insurance Corporation (Citizens) to increase property insurance rates in Monroe County. Citizens is seeking to increase homeowners insurance rates by 25.4 percent and mobile homeowners rates by 20.2 percent.
Insurance Commissioner Kevin McCarty ordered Citizens to file actuarially sound rates in Monroe County after denying a previously filed rate hike in May. In the previous filing Citizens sought to increase rates above the average rate of the top 20 insurers as it is normally required to do under Florida law. In March 2006, the Office submitted a report to the Legislature finding that the personal lines residential market is not competitive in Monroe County, thus establishing the legislatively mandated condition necessary to require Citizens to implement only actuarial rates in the county.
"The people of Monroe County are being asked to pay some of the highest insurance rates in the state of Florida," said McCarty. "I am deeply concerned about the impact on Monroe County residents and the resulting overall impact on the community."
Officers of Citizens were questioned at the hearing by senior staff and counsel from the Office of Insurance Regulation, Monroe County, and the advocacy group Fair Insurance Rates for Monroe County (FIRM). Questions to the Citizens officers primarily involved:
- Territorial Relativities - Do the relativities assigned to Monroe County disproportionately impact the area when compared to the relativities assigned to the rest of the state of Florida?
- Replacement Cost Estimator - Subsequent to the 2004 hurricanes, Citizens, along with many other insurers, realized that a portion of the insured property values on its books was undervalued. Citizens utilizes software to estimate the cost of building materials and labor that in some cases exacerbates the premium increases for replacement costs for Monroe County.
- Filing Omissions and Clarifications – Initial assessments of the Citizens filing raised questions about possible omissions which the Office pointed out and required clarification.
As part of the May order, McCarty required Citizens to revert to rates approved in 2004-2005 and to refund or credit the difference between the previously approved rate and any newly implemented rates. Members of the public were also allowed to testify on issues regarding Citizens at the hearing.
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