Posted November 07, 2007 11:18

TALLAHASSEE, Fla. – Nov. 6, 2007 – The Florida Office of Insurance regulation (FOIR) announced yesterday that it approved a new multi-peril commercial non-residential insurance program for Citizens Property Insurance Corp. (Citizens), the result of a legislative change that authorized Citizens to assume the policies of the Property and Casualty Joint Underwriting Association (PCJUA).

Citizens completed two parts of a three-part plan by June: It assumed the policyholders of the PCJUA, and then it began to sell its temporary wind-only policy for businesses that are not located in the high-risk or “wind pool” area. The third part of the plan was to develop a comprehensive program that offers multi-peril property coverage for businesses throughout the state.

The new multi-peril product provides up to $2.5 million in coverage for damage from wind, fire and other perils traditionally included in a commercial property insurance policy. FOIR has approved the policy forms and rates for Citizens to proceed with its program no later than Jan. 1, 2008.

As Citizens begins selling its new commercial multi-peril policy statewide, FOIR also ordered it to stop selling its wind-only policies – business it had assumed from the PCJUA – in areas of the state outside the high-risk coastal areas. Citizens still offers wind-only coverage in the coastal “wind pool” area.

FOIR’s order (http://www.floir.com/pdf/Citizens92481-07-FO.pdf ) also approved a 15 percent rate increase for commercial wind-only policies. Effective Jan. 1, the increase will bring the cost of Citizens’ wind coverage closer to the cost of the wind portion of the coverage offered by private insurers in the rest of the state.

“Although no one likes to see a rate increase in our state’s current insurance climate, Citizens needs additional rates in order to better ensure its ability to pay commercial claims,” says Insurance Commissioner Kevin McCarty. “I remain committed to doing everything within my power to bring property insurance rates under control and to ensure that Florida consumers are being offered the savings expected as a result of the law passed during January’s special session.”

FOIR also ordered Citizens to make a rate filing for its commercial program every year so that any necessary future rate increases can be added in smaller increments to make them more affordable to policyholders.

© 2007 FLORIDA ASSOCIATION OF REALTORS®