Blog: Insurers can raise rates before regulators approve it
Feb 10, 2011
The following article was published in the South Florida Sun Sentinel on February 9, 2011:
Insurors can raise rates before regulators approve it
By Julie Patel
Two mobile home insurers will raise rates before getting approval from regulators this year.
That’s because a law requiring insurers to get approval before they implement rate changes for homeowners expired this year.
The state House and Senate’s insurance committees approved legislation this week to rescind a similar law that applies to insurance coverage for businesses. The bills, SB 178 and HB 99, are expected to be reviewed by other committees.
A couple of legislators and a regulator at the Senate meeting expressed concerns about the impact on businesses, including those considering moving to Florida.
But Jose Gonzalez, a vice president of Associated Industries of Florida, told lawmakers on Wednesday that he supports the legislation and it’s a “big priority” for the group, which represents businesses.
Under the so-called “use and file” proposal, the Office of Insurance Regulation would review a company’s rate change proposal after it starts implementing the change and the company would have to provide refunds if regulators don’t agree with a rate hike.
The office has not approved two insurers’ rate increases for mobile homes they cover. But American Traditions and its affiliate, Modern USA, can raise them anyway for policies that are up for renewal by a statewide average of 6 percent and 7 percent, respectively. Premiums for individual mobile home owners may change by more or less of the statewide average.
Lawmakers, insurers and others also discussed the impact to insurers of rising sinkhole claims at the House insurance committee meeting Wednesday.
They bemoaned the loss of yet another home insurer: Los-Angeles based Mercury General, which reported this week that it plans to drop its roughly 8,000 homeowners policies in Florida by the end of 2012 and leave the state’s property insurance market. The company, which sells residential policies in Florida through its subsidiary American Mercury, reported a loss for the fourth quarter of last year because of California rainstorms and Florida sinkholes.
Regulators said they received Mercury’s request to leave the market in December and are still reviewing it.