(02/19/2007) - Florida Insurance Commissioner Kevin McCarty today signed an order advising residential insurers to make rate filings to include the new discount factor mandated by legislation passed during the recent special session. The new discount factor required in House Bill 1-A is to be calculated by the Florida Office of Insurance Regulation (Office) and all residential property insurers must make a rate filing incorporating the new savings on or before March 15, 2007.
"The Florida Legislature's goal was to provide immediate rate relief for Floridians," commented Commissioner McCarty, "the discounts to be included in these rate filings are a significant step in alleviating the financial burden on Florida's policyholders."
The Order requires insurers to incorporate the presumed factor determined by the Office. The rate decreases reflected by the filings will be effective for any policies written or renewed on or after June 1, 2007. If an insurer elects not to adopt the discount factor calculated by the Office, it still must make a filing reflective of the savings of the discount factor and must provide support of how those savings are derived, including a justification of the differences between the savings provided by the discount factor and those filed with the Office. A filing which does not provide the presumed factor must be accompanied by a sworn statement from the chief executive officer or chief financial officer and actuary responsible for preparing the filing. The statement must assert the filing contains all relevant information used to prepare the filing, reflects all savings, and does not contain any untrue statements.
In addition to the presumed factor filing, the Order requires insurers to subsequently make a complete "True-Up" rate filing, which reflects the savings or reductions in loss exposure from all provisions of House Bill 1-A. The complete filing shall be accompanied by the sworn statement form and provide detailed information regarding the insurer's reinsurance program for the 2007 Hurricane Season. The "True-Up" filing date will depend upon the submission of the presumed factor filing and reinsurance agreements; however, it must be submitted to the Office no later than September 30, 2007.
House Bill 1-A required the Office to calculate a presumed factor by March 15th; the Office is scheduled to have the presumed factor completed by March 1st to provide savings to consumers as soon as possible. Click here
to view a copy of the order.