TALLAHASSEE, Fla. – March 16, 2007 – Despite recent Florida state regulatory changes reducing the cost of reinsurance for primary carriers, primary homeowners’ insurers have not passed on decreases near the 24 percent lawmakers predicted in January 2007.

Yesterday, State Farm reported that most policyholders would only see a 7 percent decline, though homeowners in Broward and Miami-Dade counties could see declines up to 9.5 percent. State Farm Florida Insurance Corp. is the state’s largest private insurer and has more than 1 million customers.

The Office of Insurance Regulation must first approve the rate request. Office Spokesman Bob Lotane says that the request “doesn’t mean we’re going to be accepting their numbers.” The department will review the rates to “see that they’re justified.”

Some lawmakers who worked on insurance reform believe the rate reduction should be greater. “No insurance company sells reinsurance cheaper than the state of Florida – and even if you need more than we offer, the cost of additional reinsurance has dropped 10 percent, 15 percent or more – so I can’t understand why (State Farm’s) rates aren’t lower,” says Sen. Bill Posey (R-Rockledge)”

However, the Property Casualty Insurers Association of America warns that not all primary carriers purchase the same amount of reinsurance coverage, meaning that rate reductions are going to vary.

Gov. Crist also did not seem happy about the 7 percent. “The lower the rate filing the better, as far as I’m concerned,” Crist says. “And I know that’s how the people of our state feel. I’m hopeful that we can have them lower, and that’s what I look forward to.”

Source: Miami Herald (03/16/07) Garcia, Beatrice