Citizens Property Insurance, PCI, FAIA Representatives Discuss New Clearinghouse on June 17 Webcast Hosted by Colodny Fass’ Katie Webb
Jul 1, 2013
Representatives of Citizens Property Insurance Corporation (“Citizens”), the Property Casualty Insurers Association of America (“PCI”) and the Florida Association of Insurance Agents (“FAIA”) participated in a live Webcast discussion on June 17, 2013, about the new Citizens Clearinghouse and its enabling legislation.
The Webcast, the first in a series on this topic, was moderated by Colodny Fass Shareholder Katie Webb.
A video replay of the Webcast is available by clicking here. (If you have already created an account with FAIA’s continuing education Web site, login with the related e-mail address and password to access the video. First-time users will be prompted to register.)
Kyle Ulrich, FAIA’s Senior Vice President of Public Affairs, provided some context for the Clearinghouse, saying that a lot of policies have gone into Citizens over the past few years, perhaps 7,000 to 8,000 policies that the voluntary market perhaps could have written.
Mr. Ulrich explained that the Clearinghouse is a technological platform that will allow the enforcement of Citizens eligibility criteria under the law. While the Clearinghouse itself will not create capacity for the voluntary market, it is designed to make sure there are no alternatives before a risk goes into Citizens.
CS/SB 1770, the legislation in which the Clearinghouse was created, provides that, effective January 1, 2014, all new and renewal personal residential property insurance in Citizens must be submitted to the Clearinghouse to determine whether the policy can be written or renewed by a private insurer within premium eligibility restrictions. For new policies, if a private offer is found through the Clearinghouse that is 15 percent or less than the Citizens rate, that particular homeowner cannot be insured by Citizens.
Further, CS/SB 1770 excludes commercial residential policies from the Clearinghouse, but requires Citizens to develop procedures to divert ineligible commercial residential policies.
Renewal policies cannot stay in Citizens if the Clearinghouse finds an offer from a private insurer at the same rate or less than Citizens’ renewal rate.
Steve Bitar, Citizens’ Senior Director of Consumer and Agent Services, then discussed the Clearinghouse implementation process. He said that a solicitation for Clearinghouse software and services is currently open, with a June 25, 2013 response deadline for potential vendors. Subsequently, Citizens will evaluate responses and enter into a negotiation process expected to culminate with an award in August.
In response to a viewer question, Mr. Bitar noted that between seven to 12 internal workgroups within Citizens are examining legal and regulatory compliance perspectives regarding the Clearinghouse, as well as issues involving underwriting workflows and product development.
Answering another question, he said that CS/SB 1770 did not address specifics on carrier eligibility for participation (which is voluntary) in the Clearinghouse, and that he does not see Citizens adding additional requirements.
Mr. Bitar also said that Citizens wants to scan the marketplace regardless of agent relationships. If an agent is not authorized to write with a particular carrier, offers must still be shared with the consumer because he or she would be ineligible for Citizens.
On this note, Mr. Ulrich said that FAIA is supportive of “consumer choice and allowing consumers to see everything out there.”
Mr. Bitar added that even if offers greater than 15 percent more than Citizens’ rates come through (making the consumer eligible for Citizens), that creates a “great opportunity” for an agent and consumer to have a discussion about the levels of coverage offered under the different policies.
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