Citizens Property Insurance Market Accountability Advisory Committee to Recommend Postponing Statutory Limited Personal Residential Product Offering
Dec 13, 2012
Citizens Property Insurance Corporation’s (“Citizens”) Market Accountability Advisory Committee (“Committee”), which met this morning, December 13, 2012, discussed postponing the offering of a statutory basic personal residential product until further notice.
Pursuant to HB 1101 enacted in 2012, Citizens must offer the limited coverage option by January 1, 2013. Policies under this provision would be similar to an HO-8 policy, with dwelling repair based on “common construction materials and methods.”
Pricing of the HO-8-type product has still not been fully resolved with the Florida Office of Insurance Regulation.
Committee members expressed concern that such a product–residential insurance that is much lower-priced, but removes considerable amounts of coverage, will encourage people to sign up for this type of policy, because its price would be lower than standard HO3 policies. It was felt that this would ultimately serve to defeat Citizens’ depopulation effort, since consumers might not realize how significantly reduced their coverage would be.
“My concern as a Board member is that we can’t put this genie back in the bottle once we let it out,” Committee Member John Rollins said. “This (offering the HO-8-style policy) is absolutely the worst thing you can do if you want to shrink Citizens.”
The Committee will make a recommendation to Citizens’ Board of Governors to postpone the new product offering, although it remained unclear on how the postponement would be accomplished.
Citizens’ Board of Governors meets tomorrow, December 14.
To view the meeting materials from today’s Committee meeting, click here.
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