OFFICE OF INSURANCE REGULATION

Transcription

1 OFFICE OF INSURANCE REGULATION KEVIN M. MCCARTY COMMISSIONER IN THE MATTER OF: Case Nos.: CO CO CO CITIZENS PROPERTY INSURANCE CORPORATION / CONSENT ORDER THIS CAUSE came on for consideration upon the filing by Citizens Property Insurance Corporation (hereinafter referred to as CITIZENS ) of several rate filings with regard to Monroe County, Florida (hereinafter referred to as RATE FILINGS ) with the Office of Insurance Regulation ( OFFICE ). The OFFICE, having considered said RATE FILINGS and being otherwise fully advised in the premises, hereby finds with regard to the RATE FILINGS, and CITIZENS agrees, as follows: 1. The OFFICE has jurisdiction over the subject matter and of the parties herein. 2. CITIZENS was created by statute to provide insurance for residential and commercial property to applicants in the State of Florida who are in good faith entitled, but are unable to procure insurance through the admitted voluntary market. 3. This Consent Order applies to the following rate filings of CITIZENS to the extent that each applies to Monroe County:

2 (a) FCP , FCP , FCP , FCP and FCP (collectively referred as the 2006 Top 20 Rate Filings ); (b) FCP , FCP , FCP , FCP and FCP (collectively referred to as Statewide Actuarial Rate Filings ); and (c) FCP and FCP (collectively referred to as the Monroe County Filings ). 4. Pursuant to Section (6)(d)2., Florida Statutes, CITIZENS filed and implemented the 2006 Top 20 Rate Filings, which included rates for Monroe County. 5. Pursuant to Section (6)(d)., Florida Statutes (2005), CITIZENS filed, but has not implemented, the Statewide Actuarial Rate Filings. The filings included rates for Monroe County. 6. Section (6)(d)(4), Florida Statutes (2005), established a pilot program to evaluate issues relating to the availability and affordability of insurance in areas where historically there has been little competition. The legislation eliminated the applicability of Sections (6)(d)2. and (6)(d)3., Florida Statutes (2005), to Monroe County if the OFFICE determined that a reasonable degree of competition did not exist for personal lines residential policies. On March 1, 2006, the OFFICE issued a report titled Monroe County Reasonable Degree of Competition Pilot Project Report to the Florida Legislature. The report concluded there is not a competitive market for certain lines of business that are the subject of the High Risk Account (HRA) in Monroe County and that Monroe County is considered highly concentrated. 7. On May 1, 2006, the OFFICE issued an Order, in Case Number , which disapproved in part the 2006 Top 20 Rate Filings implemented by CITIZENS as inapplicable 2

3 to policies in the HRA in Monroe County. The OFFICE directed CITIZENS to apply the rates approved by the OFFICE in CITIZENS 2005 Top 20 Rate Filings applicable to personal lines policies in the HRA that are located in Monroe County, and to appropriately refund or credit the difference between the rates currently implemented and the rates previously approved in its 2005 Top 20 Rate Filings. The OFFICE ordered CITIZENS to make a rate filing for Monroe County only within sixty (60) days for those personal lines policies in the HRA. The OFFICE further directed CITIZENS to conduct an audit of its Monroe County personal lines policies. 8. On May 19, 2006, the OFFICE issued an Order in Case Number which approved, except for Monroe County, the 2006 Top 20 Rate Filings, and which approved, except for Monroe County, statewide average increases for the Statewide Actuarial Filings as follows: (a) twelve and four-tenths percent (+12.4%) for Homeowners (HO3) policies in the PLA and twenty-five and nine-tenths percent (+25.9%) for Homeowners (HO3) policies in the HRA, and (b) fourteen and nine-tenths percent (+14.9%) for Mobile Homes policies in the HRA, and (c) twenty-one and six-tenths percent (+21.6%) for Dwelling policies in the PLA. The OFFICE instructed CITIZENS to distribute these increases by territory. 9. On May 22, 2006, in Case Number and only with respect to those issues dealing specifically with Monroe County, CITIZENS filed a Petition for Formal Hearing requesting a hearing before the Division of Administrative Hearings (hereinafter referred to as DOAH ) in accordance with Section (1), Florida Statutes. However, CITIZENS requested that the matter not be referred to DOAH while the parties discussed an amicable resolution to the matter. 10. On June 9, 2006, in Case Number and also only with respect to those issues dealing specifically with Monroe County, CITIZENS filed another Petition for Formal 3

4 Hearing requesting a hearing before DOAH. CITIZENS also requested that the matter not be referred to DOAH while the parties discussed an amicable resolution to the matter. 11. On or about June 27, 2006, CITIZENS submitted the following Monroe County Rate Filings: (a) FCP , an HRA homeowners rate filing for Monroe County, requesting an increase of twenty-five and nine-tenths percent (+25.9%) in the hurricane portion of the dwelling insurance rate; and (b) FCP , a HRA mobile home rate filing for Monroe County, requesting an increase of twenty and four-tenths percent (+20.4%) in the hurricane portion of the mobile home insurance rate. 12. By separate letters dated July 21, 2006, the OFFICE dismissed the Petition for Formal Hearing in Case Numbers and , but permitted the amendment of both Petitions by July 31, By letter dated July 28, 2006, CITIZENS requested a brief extension of time to file amended petitions, which was granted and, on August 18, 2006, CITIZENS filed an Amended Petition for Formal Hearing in both Case Numbers and Neither Amended Petition for Formal Hearing has been acted upon by the OFFICE. 14. On August 17, 2006, the OFFICE issued an Order in Case Number , which (a) disapproved FCP and ordered CITIZENS to implement a reduction in rates of thirty-two and two-tenths percent (-32.2%) in Monroe County for HRA homeowners policies; and (b) disapproved FCP and ordered CITIZENS to implement a reduced territorial rate increase of fifteen and two-tenths percent (+15.2%) in Monroe County for HRA mobile home policies. 4

5 15. On September 12, 2006, in Case Number with respect to those issues dealing specifically with Monroe County, CITIZENS filed a Petition for Formal Hearing requesting a hearing before DOAH. The OFFICE has not acted upon this Petition. 16. In order to resolve the issues involved in the pending litigation and avoid the unnecessary expense of further litigation, CITIZENS agrees to, and the OFFICE hereby approves, the following terms and conditions: (a) This Consent Order resolves all matters pending before the OFFICE relating to Monroe County as addressed in the Orders issued in Case Numbers , and (b) In agreeing to this Consent Order, CITIZENS does not agree with the findings made by the OFFICE in the Orders issued in Case Numbers , and with respect to Monroe County, nor does the OFFICE agree with the allegations set forth in the various petitions filed by CITIZENS. (c) The provisions of this Consent Order supersede the provisions of the Orders issued in Case Numbers , and as they relate to Monroe County. Further, all Petitions filed by CITIZENS contesting the Orders issued in Case Numbers , and shall be withdrawn. (d) For FCP , effective January 1, 2007 for new and renewal business, CITIZENS agrees to implement a territorial rate change (rollback) of thirty five percent (-35%) to the hurricane portion of HRA homeowners (HO3) rates from the 2006 HRA Top 20 Rate Filings now in use in Monroe County, which were based on the provisions of Section (6)(d)2., Florida Statutes. Citizens shall not change these territorial rates in Monroe County for a period of one year from January 1, The implementation of this provision 5

6 shall not result in any change in the territorial rates for the policyholders of Citizens who are not in Monroe County. (e) For FCP , effective January 1, 2007 for new and renewal business, CITIZENS agrees to implement a territorial rate change of fifteen and two tenths percent (+15.2%) to the hurricane portion of HRA mobile home rates from the 2006 HRA Top 20 Rate Filings now in use in Monroe County, which were based on the provisions of Section (6)(d)2., Florida Statutes. This reduction from the rate requested will remain in effect for a period of one year beginning January 1, The implementation of this provision shall not result in any change in the territorial rates for the policyholders of Citizens who are not in Monroe County. (f) On or before September 29, 2006, CITIZENS shall revise rate filing FCP and rate filing FCP to reflect the territorial rate changes described in paragraphs (d) and (e) above. (g) On or before October 2, 2006, the OFFICE shall review and approve the territorial rate change in paragraph (f) above, as well as the territorial rate changes in the Statewide Actuarial Filings as most recently filed with the OFFICE. (h) On or before October 2, 2006, CITIZENS shall file with the OFFICE the required manual pages and HRCS forms for the Statewide Actuarial Filings and the filings referred in paragraph (f) above. (i) CITIZENS agrees to audit a sample of policies in Monroe County to determine the accuracy of replacement costs and mitigation credits on terms mutually agreed to between the OFFICE and CITIZENS. CITIZENS shall produce a detailed report of the results of the audit to the OFFICE within 90 days of the execution of this Order.. 6

7 17. The OFFICE and CITIZENS expressly waive a hearing in this matter, and the making of Findings of Fact and Conclusions of Law by the OFFICE and all further and other proceedings herein to which the parties may be entitled to by law. CITIZENS hereby knowingly and voluntarily waives all rights to challenge or to contest this Consent Order in any forum now available to it, including the right to any administrative proceeding, circuit or federal court action, or any appeal. 18. Each party to this action shall bear its own costs and attorneys fees. THEREFORE, the agreement between Citizens Property Insurance Corporation and the Office of Insurance Regulation, the terms and conditions of which are set forth above, is APPROVED. FURTHER, all terms and conditions contained herein are hereby ORDERED. DONE and ORDERED this day of, Kevin M. McCarty Commissioner Office of Insurance Regulation 7

8 By execution hereof, Citizens Property Insurance Corporation, consents to entry of this Consent Order, agrees without reservation to all of the above terms and conditions and shall be bound by all provisions herein. The undersigned represents that he or she has the authority to bind Citizens Property Insurance Corporation, to the terms and conditions of this Consent Order. CITIZENS PROPERTY INSURANCE CORPORATION By: Corporate Seal Name: (Please type or print) Title: Date: STATE OF COUNTY OF The foregoing instrument was acknowledged before me this day of 2006, by as (name of person) (type of authority..e.g. officer, trustee atty- in-fact) for. (company name) (Signature of the Notary) (Print, Type or Stamp Commissioned Name of Notary) Personally Known OR Produced Identification Type of Identification Produced 8

9 COPIES FURNISHED TO: Robert Ricker, President Citizens Property Insurance Corporation 101 North Monroe Street, Suite 1000 Tallahassee, Florida Susanne Murphy, Executive Vice President Citizens Property Insurance Corporation 101 North Monroe Street, Suite 1000 Tallahassee, Florida Perry Cone, General Counsel Citizens Property Insurance Corporation 101 North Monroe Street, Suite 1000 Tallahassee, Florida Tom Streukens, Deputy Commissioner Property and Casualty Office of Insurance Regulation 200 East Gaines Street Tallahassee, Florida Richard Koon, Director Mike Milnes, Deputy Director Property and Casualty Product Review Office of Insurance Regulation 200 East Gaines Street Tallahassee, Florida S. Marc Herskovitz, Esquire Office of Insurance Regulation 612 Larson Building Tallahassee, Florida David A. Yon, Esquire Jeffrey L. Frehn, Esquire Radey, Thomas, Yon & Clark, P.A. 301 South Bronough Street, Suite 200 Tallahassee, Florida