Citizens Property Insurance Corporation has praised Florida lawmakers for passing legislation to curtail unnecessary litigation and assignment of benefits (AOB) abuse, which it claims will provide relief for property insurance policyholders in the state.
Actuaries estimated that the reforms would reduce the statewide average rate need from 25.2% to 10.1% for homeowners policyholders.
In South Florida, where AOB abuse is most widespread, the average rate need is expected to drop from 30.4% to 12.8%, according to Citizens.
The passage of HB 7065 follows a five-year effort to address excessive litigation and AOB abuse in Florida, especially surrounding non-weather related water loss claims, which have soared in recent years after decades of stability.
Due to these rising costs, Citizens proposed a rate increase for 97% of its homeowners policyholders in 2019. The insurer noted that it also passed on rate reduction to 70% of policyholders in 2015.
Barry Gilway, Citizens President, CEO and Executive Director, thanked industry, business and consumer groups for the supporting the new reforms, as well as Governor Ron DeSantis, Chief Financial Officer Jimmy Patronis, and Florida Insurance Commissioner David Altmaier.
“Today’s vote is a critical step in our efforts to bring relief to our policyholders, who have had to pay the bill for runaway litigation and AOB abuse,” said Gilway. “The bottom line is we could not have done this without the leadership of Governor DeSantis, CFO Patronis, and Commissioner Altmaier.”
Additionally, Christine Ashburn, Citizens Chief of Communications, Legislative and External Affairs, praised legislative leaders and sponsors for their commitment throughout the sometimes contentious process.
“Chairman Broxson and Chairman Rommel were critical to the passage of this much needed legislation,” said Ashburn. “We now have a reform package that will make a difference.”