A Florida insurer declares itself “insolvent”
Florida loses another hurricane insurer. In another blow to Florida's hurricane, fire and theft insurance market, a Leon County circuit judge has authorized the state's Department of Financial Services to liquidate St. Johns Insurance Co. as "insolvent," which could hurt to other companies that they would have to assume the clients who lose their contracts.
Just a week ago, the insurer, which serves about 140.000 policies in Florida, announced it would write no new insurance, joining a dozen other insurers that announced similar suspensions, limited the types of homes they cover or canceled contracts altogether.
The state authority is going to liquidate the firm, based in Orlando, while it waits to transfer the insurance policies of St. Johns to Slide Insurance Co. and other companies, starting Tuesday, March 1.
The order from the aforementioned Circuit Judge, Angela Dempsey, came two days after Insurance Commissioner David Altmaier sent a letter to state CFO Jimmy Patronis saying the company had agreed to the suspension. of payments and recognized that "it is insolvent".
St. Johns, established in Florida in 2003, is known to have been in financial trouble for at least a year.
Florida loses another hurricane insurer in its battered insurance market https://t.co/qjpPYvvsc3
– Diario Las Americas (@DLasAmericas) February 28, 2022
The court award is yet another sign of trouble in Florida's property insurance market, with insurers dumping policies and advocating rate increases due to financial troubles.
This situation has led the state insurer Citizens to have to accept thousands of policies, adding up to more than 780.000 in the last two years.
These days, the Florida Congress is studying the possibility of boosting the insurance market and slowing down the flow of policies to Citizens with the bill SB 1728 presented by the president of Banking and Insurance, Jim Boyd, R-Bradenton.
St Johns Insurance Co has Demotech 'A' rating withdrawnA similar 'day of reckoning' could befall many other carriers as 1.6 approaches, the ratings firm said.https://t.co/QIsQ6E5w9I #reinsurance #insurance
— Inside P&C (@InsidePC1) February 18, 2022
Background
Fraudulent claims, such as exaggeration of stolen items, intentional damage, and fabrication of supporting evidence, among others, have increased 20% in recent years, which it says cost the insurance industry in Florida, according to All State insurer. millions of dollars.
During a Diario Las Américas interview with the president of the state Senate, Wilton Simpson, in November, the legislator pointed out in order not to be declared insolvent: “We must ensure that we have well-capitalized insurance companies in the state to promote competition in the state. And the only way we're going to create more competition to drive down costs is to make sure there's no fraud in the system."
But for the president of National Claims Adjusters, in Florida, Humberto Hernández, he said “they talk about illegal claims. We know there is fraud, but fraud barely reaches 1% of claims”.
Every year the price to be paid to insurers gradually rises. Actually, this situation started almost 30 years ago. Two months before Hurricane Andrew hit, on August 24, 1992, the premium for $100.000 of coverage was just over $800.
Since then, the price to pay has risen more than 487%, from $820 a year to $4.000 a year and with fewer benefits, while the salary has increased less than half the average increase in the cost of insurance and even life. .
Miami Daily
Author: Patricia Chung 8:23 pm