Prompted by angry cries from sinkhole policyholders who face rate hikes of up to 2,200 percent, Citizens Property Insurance Corp. will convene Monday in a special meeting to consider phasing in the rates over time to give some homeowners a break, the company said Thursday, reports Michael Peltier of the News Service of Florida.
Newly appointed Chairman Carlos Lacasa has scheduled a teleconference for Monday during which Citizens board members will discuss whether to phase in the actuarially sound – but in some cases stunningly steep – sinkhole premium increases required by lawmakers earlier this year with the passage of SB 408.
The rate hikes, announced in July, have prompted a storm of protest from the customers of the state-backed insurer, which is now the state’s largest property insurer with 1.4 million policies.
The proposed sinkhole coverage increases range from no increase in some areas of the state to an average increase of 2,226 percent in the Orlando area. Statewide, the proposed sinkhole premium increase is nearly 450 percent.
On Monday, the board will meet to discuss the pending rates and whether the sinkhole portions could be phased in. Christine Ashburn, Citizens’ director of legislative and external affairs, said the agency will have a slate of options in time for Monday’s meeting.
Citizens is holding a public hearing on Tuesday in Tampa, a region that has seen a spike in sinkhole claims and would experience some of the biggest increases. The company wants to be able to put something forward before that hearing, Ashburn said.
“The chairman believes that it was best to get all the cards on the table before the hearing,” said Ashburn.
Citizens officials have said repeatedly that sinkhole claims are threatening the company, its policyholders, and maybe the state’s residents, who back the company and would bail it out in the event of failure. Last year, the company collected $32 million in sinkhole premium, but paid out nearly $250 million in claims.
For non-sinkhole premiums, Citizens remains under a legislative directive that caps annual rate increases at 10 percent a year. By passing SB 408, lawmakers required Citizens to charge sinkhole rates that are actuarially sound. The law, however, gives the agency some discretion on how it meets those adequate rates.
Critics of the rate hikes include Sen. Mike Fasano, R-New Port Richey, and Sean Shaw, a former Insurance Consumer Advocate within the Department of Financial Services. Shaw, who now works for a Tampa law firm that handles sinkhole cases, formed a group called Policyholders of Florida, to fight the hikes.
“The Policyholders of Florida delivered a major wake up call to Citizens Property Insurance following their unanimous support of outrageous sinkhole rate hikes at their previous meeting,” Shaw said in a statement. “It’s great to see that they are now reconsidering, but this won’t silence our efforts.”