Florida Insurance Consumer Advocate Robin Westcott Urges Office of Insurance Regulation to Deny Citizens Property Insurance Rate Increase Request, Cites Success of Glide Path

Sep 20, 2012


At a public rate hearing held today, September 20, 2012, Florida Insurance Consumer Advocate (“ICA”) Robin Westcott asked the Florida Office of Insurance Regulation to deny Citizens Property Insurance Corporation’s rate increase filing.  ICA Westcott cited the success of the statutory “glide path,” which steadily increases Citizens policyholder premiums to a level of actuarially-sound rates.

A news release issued by ICA Westcott’s office is reprinted below.


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Florida Insurance Consumer Advocate Westcott Cites Success of ‘Glide Path,’ Urges OIR to Deny Citizens’ Rate Increase Request

MIAMI-Florida’s Insurance Consumer Advocate Robin Smith Westcott today urged Florida’s Office of Insurance Regulation to deny Citizens Property Insurance Corporation’s current rate filing, showing evidence that the request overestimates some cost projections, does not take into account a dramatic drop in sinkhole claims filed so far in 2012, and provides no rate relief even in territories where rate decreases are indicated.

Further, she said the “glide path,” set out by Florida’s Legislature to steadily increase policyholder premiums to rate adequacy, is working.

Westcott spoke at a public rate hearing held today at 4 p.m. in Miami. Citizens has proposed rate increases for its business in the Coastal Account, formally known as the High Risk Account (HRA), and the Personal Lines Accounts (PLA) including homeowners’, mobile home, and dwelling/fire lines of business.

“The glide path is bringing Citizens closer to actuarially sound rates without financially overwhelming consumers,” Westcott said. “Policies in some territories already have actuarially sound rates and many more will reach actuarial soundness within a year, and that was the goal – to get homeowners to a place that they can go and shop in the private market, and private insurers would be willing to compete for them. We are on a good path to making Citizens a true insurer of last resort, and reducing financial risks for all Floridians.”

Citizens’ proposed rate request also includes increases for sinkhole coverage, and Westcott said that the request appears to overestimate the cost of claims that should be denied under the newly imposed provisions of Senate Bill 408, and does not take into account the dramatic drop in claims filed in 2012 on policies subject to those new provisions. An engineering review of 106 closed Citizens claims, which were cited as part of the basis for the rate request, found that only seven claims would meet the new definition of structural damage under SB 408. Westcott also said the request does not take into account costs that will now be taken on by policyholders and which will serve to filter out claims that are not valid.

She also pointed out that Citizens is proposing no rate decreases, even in territories where rate decreases are indicated.

“This filing does not justify the increase requested,” Westcott said. “The goal is to make sure rates are adequate, but also that rates reflect actual risk so that policyholders are not bearing any financial burden beyond what is necessary to protect their families, homes and businesses.”


The Insurance Consumer Advocate is appointed by Florida Chief Financial Officer Jeff Atwater and is committed to finding solutions to insurance issues facing Floridians, calling attention to questionable insurance practices, promoting a viable insurance market responsive to the needs of Florida’s diverse population and assuring that rates are fair and justified.


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