Florida’s Office of Insurance Regulation has made contingency plans to establish a temporary reinsurance arrangement through Citizens Property Insurance Corporation in the event of a “disruptive” financial rating downgrade from Demotech.
Last week, Florida’s CFO, Jimmy Patronis, issued letters to Fannie Mae, Freddie Mac and the Federal Housing Finance Agency urging them to scrutinise any potential downgrade after Demotech had written to 17 insurers.
Following the CFO’s letter, Demotech announced they were pausing issuance of ratings to solicit further input from insurers and would announce future ratings at an unspecified date.
The Department of Financial Services and Florida’s Insurance Consumer Advocate say they are prepared to support policyholders that may need extra help.
Patronis issued the following statement: “Our priority remains Florida policyholders, and we will continue working to ensure they get the support they need. The temporary solution that was outlined today by the Governor and Commissioner Altmaier represents the State of Florida’s efforts at protecting and helping Florida policyholders.”
“We have been in contact with OIR and Citizens Property Insurance, and appreciate their willingness in working together to establish an unprecedented arrangement that would allow for a number of insurers, that Demotech is presently reevaluating, to continue offering coverage for policyholders.”
“This agreement would no doubt provide a lot of comfort to insurance agents who are monitoring things closely on behalf of policyholders. The Governor is absolutely right that the reforms passed in the insurance special session are benefitting the overall health of Florida’s insurance market.”
“This is one of the reasons why I requested that Fannie Mae and Freddie Mac avoid any knee-jerk reactions related to Demotech’s actions. My office has been, and continues to be, in constant contact with insurance stakeholders across the state so that they can communicate with their members for the benefit of our communities.”
