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Office Insurance Regulation – Demotech, Inc., an insurance company rating agency. recently downgraded or canceled the financial strength ratings of Florida property insurance companies. Financial stability ratings indicate a company’s financial strength and ability to meet financial obligations. Mortgage lenders like Fannie Mae and Freddie Mac require homeowners to insure their homes with insurance companies that have a Financial Stability Rating or better with Demotech. If the insurance company’s rating is not up to par, it can affect the homeowner’s ability to maintain insurance coverage.

Governor Ron DeSantis, Chief Financial Officer (CFO) Jimmy Patronis, Office of Insurance Regulation (OIR), Citizens Property Insurance Corporation, Florida Insurance Guaranty Association (FIGA), Florida Insurance Agents Association (FAIA) and Florida Insurance Consumer Advocate (ICA). ) all represent that consumers work together to protect and mitigate the impact of a downgrade or withdrawal.

Office Insurance Regulation

The organizations have developed a plan that will maintain coverage availability for Florida homeowners and ensure that homeowners are in compliance with their mortgage loan requirements. The plan creates a temporary reinsurance agreement through the Citizens Property Insurance Corporation that allows affected insurance companies to meet a waiver proposed by Fannie Mae and Freddie Mac that would ensure Florida homeowners can maintain coverage.

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To learn more about how a downgrade or cancellation may affect you and what to expect, please read Policyholder Questions:

Financial Strength Rating (FSR) is a measure of an insurance company’s financial stability and likelihood of meeting its financial obligations. This decision is based on the financial rating company’s assessment of how well the insurance company is performing financially and its ability to pay claims.

Will my insurance company go out of business if my insurance company’s financial soundness rating is downgraded or withdrawn?

A downgrade or cancellation of a company’s financial stability rating can result in the company going bankrupt or going out of business, but not all companies that are downgraded or removed do not automatically go out of business due to the downgrade.

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Yes, your policy is still active. If your insurance company goes out of business or decides to cancel or not renew your policy, you will receive a Cancellation Notice informing you of the effective date of the cancellation and the time available to purchase a new policy.

If my insurance company’s financial rating has been downgraded or withdrawn and I currently have an active claim, how will the downgrade affect my claim?

A downgrade or withdrawal should not affect your claim unless the company goes out of business. If the company goes out of business, the Florida Insurance Guaranty Association will settle your claim.

The Florida Insurance Guaranty Association (FIGA) was created by the Florida Legislature to protect policyholders and administer claims from homeowners insurance companies. When a company is declared bankrupt and a final liquidation order is made, FIGA begins to process and settle claims.

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Contact your insurance agent right away to discuss your options. If you decide to buy a new policy, it’s important to continue paying your premium until you buy the new policy so you don’t experience a break in coverage. You can cancel your old policy after the new policy takes effect. Get a refund of the premium amount that you have already paid but not used under the old policy, also known as unearned premium.

If my insurance company goes out of business, will I get my premium back?

Yes, you should get back the premium for the old policy that you have already paid for but not used, which is called unearned premium. When an insurance company goes out of business, unearned premiums are paid by the Florida Insurance Guaranty Association.

If my insurance company doesn’t go out of business, how will a downgrade or cancellation affect my insurance policy?

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My mortgage is backed by Freddie Mac and Fannie Mae and I am required to maintain homeowners insurance as part of my loan agreement. Will I be able to keep my homeowner’s coverage if my insurance company’s financial stability rating is downgraded or removed? How might a mortgage lender’s exit affect my mortgage loan?

Fannie Mae and Freddie Mac require that you purchase your homeowners insurance from an insurance company that meets their financial rating requirements. However, both Fannie Mae and Freddie Mac offer an exemption from their financial rating requirements. The exception applies to policies issued by an insurance company that are covered by a reinsurance company that agrees to assume responsibility for unpaid claims if the company goes out of business. A reinsurance company is just another insurance company.

Under the leadership of Governor DeSantis, CFO Jimmy Patronis and the Office of Insurance Regulation introduced a plan that would establish a temporary reinsurance arrangement through Citizens Property Insurance Corporation for insurance companies that no longer meet financial rating requirements. As part of the plan, Citizens Property Insurance Corp. agreed to assume liability for the outstanding portion if claims from insolvent insurance companies with downgraded or canceled financial stability ratings exceed the statutory payout limit set by the Florida Insurance Guaranty Association. demand.

No action is required to implement this plan. There should be no reason for your mortgage lender to require you to purchase a new policy or apply for compulsory insurance solely on the basis of a downgrade or withdrawal of your company’s financial soundness rating. Under a reinsurance agreement, your insurance company will continue to meet financial rating requirements, you will be in compliance with your mortgage loan agreement, and you will not need to obtain new insurance coverage. There are no costs associated with the program. there will be no change in policy or premium. The contract expires no later than June 1, 2023.

National Association Of Insurance Commissioners (naic) Definition

Please contact your insurance agent to discuss any questions about arranging reinsurance with Citizens Property Insurance Corporation.

The financial strength rating of the following insurance company has been downgraded from Demotech, Inc. and is participating in the Florida Temporary Market Stabilization Agreement;

Want to learn how to protect your property before and recover from a disaster? CFO Jimmy Patronis’ topics on PrepareFL will help you understand how to protect your home base.

Is your preparedness portal for tips, statistics, relevant updates and resources to help you successfully weather the storm. On September 13, 2017, the Florida Office of Emergency Management issued a State of Emergency following a State of Emergency issued by Governor Scott. The destruction of Hurricane Irma.

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The purpose of the order is to provide standard requirements applicable to hurricane insurers. For Florida residents, requirements that may affect the processing of property or risk claims include:

We anticipate that the requirements of the Emergency Order may affect the appeals process in Florida. If you have any problems with the interpretation or application of this policy in connection with the insurance and claims processes, please do not hesitate to contact StormHelp@.

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