Citizens Property Insurance Corporation Emergency Board of Governors Meeting 7/21/06
Jan 14, 2007
Citizens Property Insurance Corporation (“Citizens”) held an emergency Board of Governors Meeting today via conference call to discuss the dire market conditions for builders risk insurance in Florida. Builders risk policies insure residential and commercial projects that are under construction or renovation. There is no market availability for builders risk insurance, and companies and the Florida Office of Insurance Regulation have recently contacted Citizens requesting that Citizens revisit its earlier decision to stop writing builders risk insurance policies in Florida.
As a result, the Board voted unanimously to adopt the following policy immediately:
Citizens will renew existing builders risk insurance policies, only at actuarially sound rates;
Citizens will write new builders risk policies, only at actuarially sound rates, until 12/31/06;
Citizens will not cancel builders risk policies, other than for standard cancellation reasons cited in the policy; and,
Citizens will review the action taken regarding builders risk policies at the Board’s November, 2006, meeting.
Citizens is hopeful that some other vehicle will take over the policies by 12/31/06, as this is only an interim plan. To date, no private entities have stepped forward to assume any builders risk policies. Builders risk insurance policies are in Citizens’ High Risk Account (“HRA”) and cover only windstorm risk in the windstorm pool.
The Board also discussed the recent request from Continuing Care Communities (“CCC”) for respite from difficulties obtaining coverage. The Board proposed that Citizens reclassify licensed CCC’s as commercial residential business, provided that the buildings are 75% or more occupied by individual residents. CCC’s are currently classified as commercial non-residential and are only covered in Citizens’ HRA. The proposal was adopted by the Board unanimously.
Should you have any questions or concerns, please do not hesitate to contact this office.
Regards,
Fred E. Karlinsky