Citizens Property Insurance Corporation 2005 Deficit Assessment Approved
TALLAHASSEE (11/22/2006) - Florida Insurance Commissioner Kevin McCarty today approved a $163 million regular assessment filed by Citizens Property Insurance Corporation (Citizens) to cover the deficit in its high risk account for 2005. All assessable property insurers are required to pay the assessment to Citizens within 30 days of receipt of an invoice from Citizens.
Insurers are permitted to recoup the assessment by adding a surcharge to Florida residential property insurance policies upon the renewal date of the policy. When the Board of Governors certifies the need for an assessment to the Office of Insurance Regulation (Office), the Office reviews the arithmetic calculations involved in the Board's determination and verifies and approves the assessment.
The 2006 Legislature allocated $715 million to reduce the amount of assessments that would be collected from Floridians. Because of this, the deficits in the Citizens personal and commercial lines accounts were paid off and almost half of the $1.6 billion deficit in the high risk account was paid. The assessment approved by the Office today will be used to pay off the remainder, as is required by Florida Statute.
The $715 million appropriated by the Legislature in Senate Bill 1980 and signed into law by Gov. Jeb Bush will reduce what was expected to be an 11 percent premium surcharge to 2.5 percent.
The remainder of the 2005 deficit, approximately $887 million, will be collected over a ten year period in "emergency assessments" if the Citizens Board levies the assessment at its December board meeting as expected. The "emergency assessment," if made, would result in charges to policyholders of approximately 1.5 percent of premium or less.
Citizens is not expected to have a deficit for 2006.