Advertise here, Reinsurance News

Menu

Reinsurance News

Florida AOB reforms could reduce homeowners rate need by 15%: Citizens

30th April 2019 - Author: Matt Sheehan

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.

florida-homeActuaries 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.”

Fitch Ratings said this week that it believes that insurance carriers in Florida will be able to better estimate loss costs following the passage of the new AOB bill.

The Florida Property & Casualty Association also commended Florida lawmakers for passing the AOB reforms last week.

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous article:
Norsk Hydro updates cyber attack loss estimate to $52mn

Norwegian aluminium manufacturer Norsk Hydro has provided an updated loss estimate of NOK 400-450 million (USD $46-52 million) for the...

Close