Nikki Fried slams Gov. DeSantis’ actions on property insurance crisis
Nikki Fried makes moves to lower Florida's gas prices. Image via AP.

fried
'This dire situation demands immediate and meaningful action that protects Florida consumers.'

Agriculture Commissioner Nikki Fried is calling on Gov. Ron DeSantis to do more to stabilize Florida’s troubled property insurance market.

Fried, a Democrat running for her party’s nomination to replace DeSantis, wrote to DeSantis on Thursday slamming his approach to the crisis so far and calling on him to allow more flexibility in the Florida Hurricane Catastrophe Fund, or Cat Fund.

“The Florida Legislature’s attempt at a band-aid fix to a massive wound, coupled with what appears to be the state’s wait-and-see approach, are all too little, too late,” Fried wrote.

In a Special Session in May, the Legislature set up a $2 billion reinsurance program backed by taxpayer money to allow private insurers struggling to buy reinsurance coverage some backup coverage during hurricane season.

Florida’s property insurance industry has seen $1.5 billion in losses the last two years, four companies have gone insolvent and several more have either canceled policies or stopped writing new business. Other companies have received average rate increases of 20-30%, with some customers seeing increases of more than 50% at a time when skyrocketing inflation is already pinching pocketbooks.

That has placed pressure on Citizens Property Insurance, the state-run company created by the Legislature as an “insurer of last resort” for homeowners who can’t find affordable coverage in the private market.

But last month more pressure was heaped on Citizens, as regulators set up a cut-through reinsurance program for insurers facing downgrades, using Citizens as the backstop to pay their claims if they were to go insolvent.

Demotech, an Ohio-based ratings agency, warned 17 companies of imminent downgrades July 19, which would put customers with those companies below the threshold set by mortgage guarantors Fannie Mae and Freddie Mac.

Regulators believe the new Citizens program will allow thousands of homeowners to avoid being force-placed into new insurance companies. Citizens, though, has nearly doubled in size in two years, and has $6 billion in surplus to pay claims. If a large enough hurricane hit the state, Citizens could impose assessments on all Florida homeowners to pay off claims.

Fried, though, said the Cat Fund should be used instead of Citizens to help stabilize the market.

“Adding further unfunded mandates to Citizens could result in every Florida homeowner paying higher premiums to recoup any losses. Meanwhile, the Cat Fund is in a superior financial position, reporting to the State Board of Administration in May that it will have almost $12.8 billion in the bank by year’s end, and is already globally recognized as the primary reinsurer for Florida companies,” Fried stated.

She specifically requested the Cat Fund’s reinsurance rates for smaller private companies be lowered so they can afford coverage, and its retention rate — or threshold of claims that spurs reinsurance coverage — be lowered.

Fried also called for the Office of Insurance Regulation to rescind the 6.4% average statewide homeowner rate increase it approved in June, which was much lower than the 10.8% requested by Citizens.

“Neither Florida homeowners nor the insurance companies they depend on for coverage can wait another year or more for a solution to this ongoing crisis,” Fried wrote. “This dire situation demands immediate and meaningful action that protects Florida consumers and puts the financial interests of Florida homeowners first.”

Gray Rohrer


3 comments

  • Joe Corsin

    August 5, 2022 at 7:44 am

    Vote RED for low wage slavery and capitalist scams
    Vote RED for shoveling money to the rich
    Vote RED for abominable grifting by New York billionaire presidents
    Vote RED for lies lies and more lies

    Reply

    • Impeach Biden

      August 8, 2022 at 2:35 pm

      Where did Biden and his family get their millions from?

      Reply

  • Andrew Linko

    August 6, 2022 at 7:06 pm

    The only way to stop this insurance robbery is to go back all the way to 1963, when Congress let the States regulate insurance and have a national regulation on insurance. For those who say it won’t work, look at FEMA, those in floor zones pay more, but you still have that choice. A moratorium on all political expenditures or donations by insurance companies until this situation is corrected.

    Reply

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