|
Rates: Filings Made by Insurers to Reflect Savings from the Expanded FHCF Coverage |
|
|
|
|
11/05/2008 |
From Senate Banking & Insurance Committee, Status of the Cat Fund, October 2008
The Legislature mandated that the savings insurers realize through
purchasing expanded FHCF coverage created by ch. 2007-1, L.O.F., be
reflected in rate filings so that the benefits of the fund’s expansion
would be passed on to policyholders. To that end, the legislation
required the Office of Insurance Regulation (OIR) to determine a
presumed savings factor that would be applied to every policy renewed
on or after June 1, 2007 by an insurer that purchased expanded FHCF
coverage. Each insurer was required to make a rate filing that took the
presumed factor into account. In the tables below, the column “proposed
presumed factor” refers to the increase or decrease in rate the insurer
filed for while taking into account the presumed factor; the column
“final presumed factor” is the increase or decrease that the OIR
approved.
Because many insurers had not finalized their reinsurance purchases for
the 2007 hurricane season at the time they were required to submit the
presumed factor filing, the OIR permitted insurers to make a “true-up”
rate filing that was designed to take into account all the savings
created by ch. 2007-1, L.O.F., and also the actual cost of the final
reinsurance treaties that the various insurers had negotiated. The
filing was due no later than October 1, 2007, and, if approved, was
effective on all new or renewed policies entered into 90 days after
that date (essentially after year’s end). The charts’ “proposed true-up
filing” columns signify the rate increase or decrease the insurer
requested at this filing, while the “final true-up filing” columns
provide the increase or decrease the OIR approved. Not all true-up
filings have been approved, so the status of the insurer’s true-up
filing is found at the far right of each chart. Any additional rate
decreases due to mitigation credits are reflected in the “mitigation
discounts” column. The total percentage rate reduction stemming from
the 2007 legislation is found in the “total rate change” column. All
figures in the columns were provided by the Office of Insurance
Regulation.
Rate Filings Made by Insurers to Reflect Savings from the Expanded FHCF Coverage
|
