Redrafted Florida Annual Insurer Report Card Rules Redefine ‘Complaint;’ Additional Out-of-State Insurer Data Requested at Today’s Rule Hearing

Sep 13, 2010


A hearing on proposed Rules relating to Florida’s mandated annual report card for authorized residential property insurers was held today, September 13, 2010, by the Florida Department of Financial Services (“DFS”).  The following proposed Rules were reviewed, along with testimony provided by interested parties in attendance:

69M-236.001: Purpose
69M-236.002: Definitions
69M-236.003: Methodology
69M-236.004: Limitations and Exclusions
69M-236.005: Data Sources

Office of the Florida Insurance Consumer Advocate (“ICA”) Senior Attorney Terry Butler presided over the hearing and briefly explained the proposed Rules, which establish procedures by which the ICA will assign letter grades to insurers based on their complaint history and claims payment timeliness. 

Mr. Butler noted that the proposed Rules have been significantly amended from their original draft and no longer address the issue of whether a complaint is valid or invalid.  This provision has been amended in an effort to address the concerns raised by insurance industry representatives in reference to the ambiguity of the terms “valid” or “invalid” complaint. 

As now drafted below, a “complaint” is defined as a writing that would require the DFS Division of Consumer Services to contact the insurer and address the issue raised by the insured:

69M-236.002 Definitions

(1)   “Complaint” means any written communication, or oral communication subsequently converted to a written form, received by the Division that expresses dissatisfaction with a specific personal residential property insurer and requires the Division of Consumer Services to contact the personal residential property insurer in order to address the dissatisfaction expressed in the communication. Communications received by the Division that are determined by the Division to be an inquiry that do not require contact with a particular insurer do not constitute a complaint.  

While acknowledging the proposed Rules have improved over the course of their development, insurance company representatives present at the Hearing continued to express continued concerns, which include:

  • A retroactive application of the proposed Rules to claims over the past five years
  • Possible policyholder confusion could cause greater uncertainty in Florida’s already fragile insurance marketplace
  • The process whereby insurers document, process and account for claims data is not uniform and therefore, the provisions of the proposed Rules could result in outcomes that do not accurately reflect the claims handling process.

A Citizens Property Insurance Corporation (“Citizens”) representative testified that the proposed Rules should not apply to Citizens, given its unique position in the Florida marketplace.  He suggested there are many statutes specific only to Citizens that would place the insurer at a disadvantage in the grading scale.

During the hearing, ICA Actuary Steve Alexander also requested that insurers provide additional data on claims information that could be captured from claims occurring outside of Florida.  Explaining that while it is his understanding that these numbers would be minimal, if they were ultimately significant, the data warrant additional evaluation to address potential resulting issues.  

Before concluding the hearing, Mr. Butler noted that the record will remain open for additional written comments until September 24, 2010.

A copy of the agenda, proposed Rule texts and report card form are attached for review. 



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