Florida's Temporary Market Stabilization Arrangement
The Florida Office of Insurance Regulation (OIR) announced a plan to establish a temporary market stabilization arrangement through Citizens Property Insurance Corporation (Citizens) in the event of disruptive financial rating downgrade. This unprecedented solution would allow insurers to meet an exception offered by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and ensures Floridians can maintain coverage during hurricane season.
The temporary market stabilization arrangement is a substitute for an acceptable financial stability rating for policies with mortgages backed by Fannie Mae and Freddie Mac. The arrangement provides that if an insurer is covered by a reinsurer who assumes, by endorsement, 100 percent of the insurer’s liability or any covered loss payable, but unpaid by the insurer, for reason of insolvency, it meets the exemption requirements for Fannie Mae and Freddie Mac.
On December 7, 2022, Fannie Mae and Freddie Mac noticed all of its Single-Family Sellers/Services with guidance on the acceptance of property insurance policies in Florida, in conjunction with OIR's establishment of the Temporary Market Stabilization Arrangement. More information is available here.
A full list of frequently asked questions is available under the box labeled "Resources."
- PRESS RELEASE: Florida Establishes Temporary Reinsurance Arrangement for Insurers Facing Potential Financial Stability Rating Downgrades
- OIR's Letter to Demotech (July 21, 2022)
- Chief Financial Officer Patronis' Letters to Fannie Mae, Freddie Mac and the Federal Housing Finance Agency (July 21, 2022)
- Frequently Asked Questions
- Immediate Final Order (August 2, 2022)
- PRESS RELEASE: Florida's Temporary Market Stabilization Arrangement Accepted by Fannie Mae and Freddie Mac
The following companies are participating in the Temporary Market Stabilization Arrangement:
- United Property & Casualty Insurance Company