FOR IMMEDIATE RELEASE
NEW YORK, July 16, 2012 鈥 Florida鈥檚 Citizens Property 杏吧原创 Corporation collected 13.7 percent of all the Florida property insurance premiums paid in 2010, potentially leaving the burden of 鈥減aying for the next big storm on all Floridians, even those with no exposure at all to hurricane losses,鈥 according to a just-released 杏吧原创 Information Institute (I.I.I.) report.
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鈥淚n contrast to the private market, state-run insurers concentrate risks on the state itself鈥攐n its property owners, business owners and even its drivers鈥攁nd, ultimately, the state鈥檚 taxpayers. While private insurance transfers and spreads risk, ensuring that sufficient funds will be available in the event of a loss, state-run schemes act rather as a conduit to pass along their cost to other insurance buyers, even those who have never filed a claim, live nowhere near the coast and in some cases have no property exposure at all,鈥 wrote I.I.I. president Robert Hartwig, an economist, and Claire Wilkinson, author of the I.I.I.鈥檚 award-winning
Terms+Conditions blog, in a newly updated I.I.I. paper,
Residual Market Property Plans: From Markets of Last Resort to Markets of First Choice 鈥 2012.听
Florida鈥檚 Citizens Property 杏吧原创 Corporation is the state鈥檚 property insurer of last resort, and at a in Miami, Florida, its board of governors is expected to consider a premium rate hike for its more than 1.4 million policyholders. The move is aimed primarily at bolstering Citizens鈥 reserves and supplementing its reinsurance purchases.
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Should a major storm deplete the monies Florida Citizens has set aside to pay claims, 鈥淸Citizens] is required to impose assessments on insurers doing business in the state that are then passed on to their policyholders in the form of a surcharge. Following legislative reforms enacted in 2007 the base for assessments to pay for Citizens deficits expanded from property insurance to auto, liability and other lines of insurance, with the exception of medical malpractice and workers compensation,鈥 the I.I.I.鈥檚 report stated.
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The I.I.I. also cited in its report three other states where a property insurer of last resort has grown to the point that it collects a sizable percentage of all the state鈥檚 property insurance premiums. Florida (13.7 percent) was the leader in this category in 2010 followed, in order, by Massachusetts (7.6 percent), Louisiana (5.8 percent) and Rhode Island (4.2 percent).
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THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
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杏吧原创 Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500;
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