Citizen Insurance Chief details problematic industries

By | October 14, 2021
Florida News Times

Tallahassee (News Service Florida)

The head of state-owned Citizens Property Insurance Corp. points out that a “sea of ​​red ink” and private insurance is losing a lump of gold, while homeowners are growing and struggling to find coverage. I explained to the industry.


“The continuation of losses in the market is absolutely unbelievable,” Barry Gilway, president and CEO of Citizen, told the Home Insurance and Banking Subcommittee. “It is not a decision made by one or two companies. In fact, what is happening in the market affects every company in the market.”

Gilway appeared before the panel less than six months after legislators took steps to strengthen the property insurance system (SB 76). However, as evidence of ongoing problems, the number of policies written by citizens has grown to over 700,000 and is expected to exceed one million next year as homeowners seek compensation.

Gilway’s presentation focused on the financial issues of the insurance industry, but D-Wellington representative Matt Willit cited disabled veterans who were hit by a significant rate hike and affected homeowners. I asked about

“If disabled veterans holding bonds can’t insure their homes when they’re at the limit, where’s the limit?” Wilhite asked.

Wednesday’s meeting did not include a detailed discussion of suggestions to address the issue, as legislators prepare to start the 2022 legislative meeting in January. As an example of an idea, R-Miramar Rep. Tom Fabricio could open up the market more widely to what is known as a surplus line carrier, and not face the same regulatory oversight as more traditional insurers. was highlighted.

However, Evan Jane, co-leader of House Minority of D-Dania Beach, pointed to several changes to the real estate insurance system over the past two decades and questioned whether the state needed a new approach.

“Should we be moving in a completely different direction?” Jane asked. “What we’re trying to do is that a lot of it is built on each other. Still, we keep searching for the same results and find ourselves in these weird situations. Something new. What should I look for? “

Citizens was originally set up as a last resort insurance company, but has grown significantly since mid-2020 as private insurers have raised rates and reduced policies in an effort to curb economic losses.

According to the data posted on the website, citizens added around 22,000 policies last month and there were 708,919 policies as of September 30. It has acquired about 200,000 policies, with a total of 511,055 policies as of September 30, 2020, and Gilway recently said that its initial 2022 forecast will include between 1 and 1.3 million policies. ..

Many lawmakers and state leaders have long sought to move homeowners from citizens to the private market, primarily due to concerns about taxpayers’ financial risks in the event of a major hurricane in Florida. I’ve been doing it.

However, in addition to reducing the amount of coverage that private insurers can write due to financial problems, Gilway said citizens often have lower rates than private companies. In addition, many homeowners in areas such as southeastern Florida rely on their citizens because they have few other coverage options.

The law, passed in April, took a number of steps, including helping curb lawsuits against insurance companies and gradually increasing the limit on rate hikes for citizens’ customers.

However, concerns about the First Amendment were one of the major parts of a bill designed by federal judges to prevent contractors from filing roof damage claims to homeowners. It was blocked. Insurance companies claim that they are facing rising costs due to unnecessary, if not fraudulent, roof damage claims.

In a way, Gilway’s remarks on Wednesday echoed state insurance commissioner David Altmeier, who told the Senate last month that the real estate insurance market was “devastating.”

Gilway, who has been in the insurance business for 51 years, used graphics to show legislators that dozens of private insurers have lost net income in recent years. The factors he cited included legal costs and reinsurance costs. This is essentially insurance that the insurance company buys as a backup.

In addition, Gilway said the 2020 Insurance Regulatory Authority received 105 tax returns from insurance companies seeking a 10% or more increase. According to information given by Gilway, customers of some companies have seen a price increase of more than 25 percent in 2020 and 2021.

Gilway said the situation was not “sustainable”.

“It is unacceptable for Floridians to face tremendous growth rates,” he said.