TALLAHASSEE — As the state-backed Citizens Property Insurance Corp. continues to balloon, officials this week praised steps that lawmakers took during a special legislative session to address the troubled property-insurance market.
But they said it could be more than a year before many tangible changes are seen.
Citizens President and CEO Barry Gilway told the Consumer Services Committee of the agency’s Board of Governors that he hopes the changes will “stabilize the market.” He primarily pointed to part of the legislation that set aside $2 billion to provide additional reinsurance for property insurers that otherwise might not be able to buy the crucial backup coverage on the private market.
“I think the hope is that the immediate impact would be it might loosen some of the purse strings relative to the reinsurance community,” Gilway said.
But Gilway added that most insurance-based legislation that passes doesn’t have “a real impact” until it goes through the entire insurance policy cycle, “which as you know, is a minimum of 16 to 18 months.”
“So, nothing immediate,” he added.
Created as an insurer of last resort for homeowners unable to find other coverage, Citizens had 875,413 policies as of Friday, up from 589,041 policies on April 30, 2021, and 453,911 policies on April 30, 2020.
During the special session last week, lawmakers didn’t directly address issues such as the growth of Citizens and its premiums. Lawmakers made changes that involve the broader market, such as allowing insurance policies to include new deductibles for roof damage, imposing restrictions on insurers that seek to refuse to write or renew policies based on the ages of roofs and placing additional restrictions on what are known as “bad faith” lawsuits against insurers.
The Restoration Association of Florida and Air Quality Assessors, LLC, an Orlando firm that does work such as mold testing and leak detection, filed a constitutional challenge Tuesday that focused on part of the legislation that restricted attorney fees in lawsuits stemming from “assignment of benefits.” In assignment of benefits, homeowners sign over insurance claims to contractors. Contractors are then able to seek payment from insurance companies, often resulting in litigation that private insurers have long blamed for the skyrocketing costs.
Christine Ashburn, Citizens’ chief of communications, legislative and external affairs, told the Consumer Services Committee that “you’re going to see carriers move relatively quickly” on parts of the legislation dealing with roof-damage claims. Insurers in recent years have blamed questionable, if not fraudulent, roof claims for driving up costs.
Otherwise, agreeing with Gilway that people won’t see immediate changes, Ashburn said “these are all great steps in the right direction.”