Meeting Packet — Insurance & Banking Subcommittee, Florida House of Representatives (October 18, 2023)
Summary
Meeting packet for the Florida House of Representatives Commerce Committee, Insurance & Banking Subcommittee, for Wednesday, October 18, 2023, 1:30 PM – 3:00 PM, with Wyman Duggan as Chair. The agenda lists a Property Insurance Market presentation by the Florida Office of Insurance Regulation and Michael Yaworsky, Insurance Commissioner. The presentation states that requests to assume Citizens' policies increased over 800% year over year and that a total of 646,617 policies were approved for assumption in 2023. It reports Hurricane Ian total claims of 758,644 with 90.2% closed as of October 9, 2023.
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“Meeting Packet — Insurance & Banking Subcommittee, Florida House of Representatives (October 18, 2023).”
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Insurance & Banking Subcommittee
Wednesday, October 18, 2023
1:30 PM - 3:00 PM
Morris Hall (17 HOB)
Meeting Packet
Paul Renner Wyman Duggan
Speaker Chair
The Florida House of Representatives
Commerce Committee
Insurance & Banking Subcommittee
Paul Renner Wyman Duggan
Speaker Chair
Meeting Agenda
Wednesday, October 18, 2023
1:30 PM – 3:00 PM
Morris Hall (17 HOB)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Presentation:
Property Insurance Market, by the Florida Office of Insurance Regulation
Michael Yaworsky, Insurance Commissioner
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
- - FLORIDA OFFICE OF
11n Insurance
~, Regulation
Florida’s Residential
Property Insurance Market
COMMISSIONER MICHAEL YAWORSKY
OCTOBER 18, 2023
Florida Office of '1(1
Insurance
Regulation (OIR)
Overview Department of Financial Services Office of Insurance Regulation
Mission • Insurance agents and agencies
• Certificates of authority
• Insurance consumer services
To promote a stable and • Product review to include policy
• Insurance fraud
competitive insurance market for forms and rates
• Workers' compensation
consumers. • Market regulation
administration
• Financial oversight
Vision • Rehabilitation and liquidation
OIR envisions a robust and
competitive insurance market
while maintaining protections for
the insurance-buying public.
2
• Senate Bill 7052 (2023) enacted consumer protections intended to support
Florida’s policyholders following a disaster and strengthened OIR’s regulatory
authority.
• House Bill 837 (2023) modified the bad faith framework, eliminated one way
attorney’s fees and fee multipliers and ensured that Floridians can’t be held
liable for damages if the person suing is more at fault.
Legislative • House Bill 799 (2023) required OIR to conduct a wind-loss mitigation study
to determine how to include wind uplift prevention to the list of windstorm
Reform mitigation measures for purposes of policyholder mitigation discounts.
• Senate Bill 2-D (2022) enacted pro-consumer measures to help alleviate rising
insurance costs, to increase insurance claim transparency, and to crack down
on frivolous lawsuits.
• Senate Bill 2-A (2022) eliminated one-way attorney fees for property
insurance, strengthened the regulatory authority of OIR, established a new
optional state reinsurance program, and required insurers to more promptly
communicate, investigate, and pay valid claims.
3
2023 Implementation Activities '1(1
OIR Reorganization
• Appointed a Deputy Commissioner of Market Regulation
• 28 new full-time employee positions
Rule Promulgation
• The Financial Services Commission approved rules related to:
• Financial and market conduct exam methodology
• Notification of temporary suspension of writing new business
• Claims handling manuals
4
2023 Implementation Activities '1(1
Home Hardening
• Updating the “Uniform Mitigation Verification Inspection
Form” with new building instruments and techniques that have
been developed since 2008
• Exploring techniques to mitigate against perils beyond wind
5
New Company Admissions '1(1
OIR has approved five property & casualty insurers to enter Florida’s
market this year following historic legislative reforms to strengthen
Florida’s insurance market:
• Orange Insurance Exchange • Mainsail Insurance Company
• Orion180 Select Insurance Company • Tailrow Insurance Company
• Orion180 Insurance Company
National carriers have stated their commitment to Florida and have
long-term plans to grow in the state.
6
Citizens Takeouts '1(1
• The Citizens takeout program was created by the Florida Legislature
to reduce the number of Citizens’ insured properties and exposure.
• Requests by companies to assume Citizens’ policies has increased over
800% year over year.
• OIR has approved a total of 646,617 policies for assumption in 2023.
7
Admitted Property Market vs. Non-Admitted Property Market
Pol icies in Force (Data as of 09/ 11/ 2023)
D Surp lus Lines
100% D Citizens
■ Adm itted
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Q2
Data is from Quarterly Supplemental Reporting (QUASR} and Florida Surplus Lines Service Office (FSLSO} and does not include State Farm for years 2014-2018 and American Coastal Insur ance Company, United Pr operty & Casualty
Insurance Company, and Family Security Insurance Company for years 2017 and 2018 due to trade secret declarations.
8
New policies written in the admitted market '1(1
2,000,000
,8 00, 000
1 ,600,000
,400,000
,200,000
,000,000
800,000
600,000
400,000
200, 000
0
2 00'9 20 10 2011 2012 20 13 2014 20'16 20 17 2018 2-019 2021 9
Data of surplus Jin es insurers ar e not included.
Breakdown of a rate calculation for a
residential homeowners line of business '1(1
HOMEOWNERS COSTS AS A PERCENTAGE OF
ACTUARIALLY SOUND PREMIUM
Commissions, 7%
/ Administrative, 8%
Non-Hurricane Loss ""'\. Profit &
& LAE, 31% \ / Contingency, 4%
Premium Tax, 2% Reinsurance, 30%
Average Annual ~
Hurricane Loss &
10
LAE, 18%
Performance of Florida Domestic Property Companies
N et Income, Net Underw riting Ga i ns, and Average Combined Ratio ( Data as of 09/ 11/ 2023)
4 00
10001111
D Net Income
'1(1
350 D Net Underwrit ing Ga i ns
800 1111 - Average Comb ined Ratio
300
6001111 250
200
4001111
150
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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2 0 18 2019 2020 2021 2022 2023Q2
Data is from statutory financial statements submitted to the National Association of Insurance Commissioners (NAIC}. Citizens Property Insurance Corporation is not included.
11
2023-2024 Reinsurance '1(1
• Despite rumored 50-60% increases at the beginning of the year,
companies reported the 2023 risk-adjusted change in reinsurance
cost from 2022 was on average 27.03%.
• All Florida carriers were able to secure full reinsurance coverage
for the 2023-2024 contract year.
12
Property Claims Litigation Report '1(1
The Property Claims Litigation Report is an annual data call capturing the full
scope of every claim closed during the reporting year. It includes information
on the claim filing, litigation, public adjuster, vendors, and associated costs.
Closed Litigated
Claims Claims
13
Hurricane Response & Claims
Handling '1(1
Claims Reported
In response to Hurricane Idalia, under the authority of
Ian
Governor DeSantis’ Emergency Order, OIR issued EO
315284-23 to protect policyholders in impacted counties,
effective through October 31, 2023. Idalia
Hurricane Idalia (data as of October 12, 2023)
• Total Claims: 23,423
• Percent Claims Closed: 65.4%
Hurricane Ian (data as of October 9, 2023)
• Total Claims: 758,644
• Percent Claims Closed: 90.2%
14
Private Flood Insurance
Insurance companies writing in the private flood insurance market are
currently writing primary or excess flood insurance outside of the
National Flood Insurance Program.
OIR has made the development of the private flood market a priority by:
• Streamlining form and rate filing procedures
• Encouraging company participation as flood writers
• Requiring the submission of private flood data
• As of 2022, 107,825 private flood policies were in force across the state, which is
an increase of 144% from 2018.
15
Private Flood Insurance
Private Flood Policies in Force
160,000
140,000 135,994
120,000
107,825
100,000
82,968 84,312
80,000
60,000
44,252
40,000
20,000
0
2018 2019 2020 2021 2022
16
Contact Information '1(1
Kevin Jacobs, Deputy Chief of Staff
I<.evin.Jacobs@floir.com
(850) 413-5011
Stephen Marante, Deputy Government Mfairs Director
Stephen.Marante@floir.com
(850) 413-2427
For more information visit www.floir.com.
17
Florida Office of Insurance Regulation
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