|Date:||June 16, 2016|
The state's insurance consumer advocate has called for a public hearing over Heritage Property & Casualty's requested statewide average 14.9-percent rate increase for former policyholders of state-run Citizens Insurance Corp.
A spokeswoman for the state Office of Insurance Regulation said no decision has been made on the request Sha'Ron James made in a May 13 letter. James shared the letter with the Sun Sentinel this week.
Heritage Chairman and CEO Bruce Lucas and President Richard Widdicombe have not responded to emails requesting comment.
State law requires a public hearing over requested average rate increases of 15 percent or above, James' letter states, and Heritage's 14.9 percent request "falls just shy of the requirements." But state law also allows the state regulatory agency to call a public hearing on rate filings "when deemed necessary."
"I believe a public hearing is in the best interest of Florida's consumers to ensure that the rate increase requested by Heritage is fair and justified, and further provides the opportunity for public commentary on this anticipated industry trend," James' letter said.
In an email on Thursday, James said insurers are seeking rate increases "across the board — be it workers' compensation, auto, health or property — and Florida's consumers have the right to know how the increases will affect their access to meaningful and affordable insurance products in the future."
She said Heritage's rate increase request warrants "transparent, thoughtful analysis and discussion" … "especially after Heritage executives specifically cited loss claims and (Assignments of Benefits) as factors contributing to the increase."
Belinda Miller, chief of staff for the Office of Insurance Regulation, said by email on Wednesday that "we have not set a hearing nor made any decisions on this yet."
But Heritage's recent rate- and policy-change requests have drawn scrutiny from the regulators.
Regulators replied to the company's April 6 rate increase request by asking how its projected losses would be affected if the company was allowed to impose the same restrictions on emergency repair spending as recently approved for Citizens. In response, the company said its loss projections were unrelated to the emergency repair cap "since the revisions are intended to clarify the intent of coverage rather than limit or extend coverage."
But on Tuesday, Sandra Starnes, director of property and casualty review for the state agency, noted that Citizens expects the revisions to decrease its losses by 8 percent. Citizens' upcoming rate increase request "will have to account for "the expected decrease, Starnes said.
And in May, a state analyst warned Heritage that requested policy revisions would be disapproved because they included the same restrictions on policyholders' ability to sign over policy benefits that had been rejected by the state as violations of state law when sought by another insurer two years earlier.
The analyst also noted that Heritage sought "more restrictions" in areas such as customers' "Duties After Loss" than granted for Citizens and other companies invited to request them.
At the end of 2015, 75 percent of Heritage's personal residential customers were former policyholders of state-run Citizens Property Insurance Corp. who were transferred to Heritage through the state-mandated "depopulation" program.
While its statewide average requested increase is 14.9 percent, the Clearwater-based company is seeking larger increases in South Florida, including a 21.4-percent increase for policies in the Fort Lauderdale region and 25 percent in coastal Broward and Miami-Dade counties.
Heritage has increased its business in South Florida at a greater rate than the rest of the state, largely because that's where nearly half of Citizens' policyholders are located. At the end of 2015, Heritage insured 96,179 customers in the tri-county region — a 40 percent increase over the end of 2014.
The company, which began operations in August 2012 and went public in 2014, reported $92.5 million in net income in 2015, according to its annual 10-K report filed with the Securities Exchange Commission.