Insurance Consumer Advocate: Slow the Sinkhole Rate Increase

Robin Wescott, Florida's newly-appointed insurance consumer advocate, is calling for a thorough review of a request by Citizens Property Insurance to raise sinkhole coverage premiums by 429 percent statewide; and even if the increase is warranted, to slowly implement it.

Wescott wrote letters Wednesday to Office of Insurance Regulation Commissioner Kevin McCarty and Citizens' executive director Scott Wallace, urging an "incremental" approach to the proposed rate increase.

"If there are increases supported in this filing that are substantial in nature, I would ask that you would encourage Citizens to responsibly implement the rate filing in increments that will not unduly burden consumers. I know that you have seen many companies take this approach in the normal course of business and it does not seem prudent for Citizens to ignore affordability in the implementation of increases," she wrote to McCarty.

The proposed rate increase has raised the ire of some lawmakers, even some who backed SB 408, which allowed Citizens to raise sinkhole rates higher than their annual 10 percent cap on overall rate increases. In a Cabinet meeting Tuesday, McCarty said his office will take into account other provisions of SB 408 designed to reduce fraudulent or frivolous sinkhole claims helping to drive the cost for Citizens. Chief Financial Officer Jeff Atwater said the insurer should have taken the likely reduced claims into account when developing their rate increase request, but a Citizens spokesperson has stated they did take SB 408 into their deliberations over the new rates.