Sen. Mike Fasano, R-New Port Richey, won a small battle last week in the fight against proposed rate increases for state-backed Citizens Property Insurance, but now hes looking to win the war.
The Office of Insurance Regulation, which will make the ultimate decision about the rate hikes, opted to hold the hearing over the increase in Tampa, instead of the usual Tallahassee hearing, because much of the increases would fall on homeowners in the area.
Citizens plans to raise premiums by a statewide average of 12 percent for coastal accounts and 25 percent for personal accounts, but sinkhole coverage in some areas will rise by more than 2,000 percent.
Fasano had asked the OIR to hold localized hearings.
I was pleased. I appreciated that Insurance Commissioner (Kevin) McCarthy accepted our request to have a hearing in Tampa, where the proposed rate increase would have the harshest effect, Fasano said.
The OIR hearing will be held at the Tampa Convention Center at 4 p.m. on Sept. 13. Fasano said the hearing will be packed with residents from the area, but also from across the state.
In addition, Fasano will hold a rally against the rate increase Tuesday from 4 p.m. to 6 p.m. at the Pasco County Government Center. Rep. Richard Corcoran, R-New Port Richey, will join him, and Sen. Charlie Dean, R-Inverness, will hold similar rallies in his district.
Tampa-area lawmakers are most upset over the rate request because the increases would hurt their constituents the most. Citizens' policyholders in coastal Pasco County face a rate hike of 183 percent, from $1,270 to $3,598, while the rest of the county faces a 200 percent increase, from $1,475 to $4,440. Coastal Hernando County homeowners rates would rise from $1,356 to $5,734 (320 percent).
At the heart of Citizens increase request is a rise in sinkhole claims in recent years, many of them alleged to be frivolous or fraudulent. In 2010, Citizens received $32 million in sinkhole premiums and paid out $245 million in sinkhole claims.
But SB 408, passed by the Legislature and signed into law by Gov. Rick Scott this year, is supposed to provide protection against faulty sinkhole claims by ensuring money goes to home repairs. Some lawmakers who pushed for the bill were surprised by the increase, and suggested Citizens evaluate the impact of the new law after a year before seeking such a high increase.
Citizens did, in fact, take into consideration the provision of Senate Bill 408 when preparing our sinkhole rate filing, Citizens spokesperson Candace Bunker said last week.
Fasano says lawmakers who backed the bill shouldnt be surprised. In addition to the sinkhole claim protections, SB 408 also decoupled sinkhole rates from Citizens annual rate increase cap of 10 percent.
My colleagues who voted for this bill are running for the hills, Fasano said.
During the floor debate over SB 408, Fasano warned that because many lenders require sinkhole coverage, the jump in rates could further upset the already dismal housing market. He said Monday that prediction is coming true, with some residents being reminded by their banks of their sinkhole coverage requirements.
For Fasano, the solution is to return to the 10 percent overall cap on Citizens rates. Part of the impetus for SB 408 was to get Citizens to actuarially sound rates, thus making private insurers rates more palatable and hopefully enticing more insurers to come to Florida and drive down rates through competition.
But that is a process that could take time, and drastically increase sinkhole rates in the interim. Instead, Fasano wants to see Citizens get to actuarially sound rates over a very long period of time.
Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.
