Citizens Property Insurance Corp. Ordered to Reassess Proposed Rate Increases

State regulators have directed the Citizens Property Insurance Corp., a state-backed entity, to reevaluate and potentially decrease their proposed rate increases. This comes as a direct response to Florida Insurance Commissioner Michael Yaworsky’s objections against some components of Citizens’ proposed rate hike.

The Contested Rate Proposal

Citizens had initially suggested a rate increase of 12% for homeowners holding the most widely used policies. The state Office of Insurance Regulation’s website displayed the signed order which commanded Citizens to:

“Calculate new, reduced, overall average statewide rate increases for the rate filings.”

Spokesman’s Statement

Michael Peltier, representing Citizens, communicated via email on Monday: “We are reviewing the final order and will submit a revised set of recommendations, as requested, based upon OIR’s findings and directives.”

Background: Citizens’ Growth and Rate Increases

Citizens have witnessed a dramatic surge in policy numbers in recent years:

  • 486,773 policies on July 31, 2020
  • 661,150 policies on July 31, 2021
  • 994,456 policies on July 31, 2022
  • 1,363,606 policies as of Aug. 11, 2023,

In light of this growth, Citizens pursued approval from the Office of Insurance Regulation for an overall rate increase of 13.3%, with a 12% hike specifically for “multi-peril” policies on main homes. However, this year, the state law capped any potential increase to a maximum of 12% for these policies.

Reasoning Behind the Rate Increase

Citizens’ rationale for the proposed rate hikes includes:

  • Lower rates than private insurers: Citizens often charge below the rate of private insurers. This disparity undermines the state’s prolonged attempts to transition policies to the private sector.
  • Need for actuarial soundness: The corporation stresses the necessity of higher rates to ensure both overall and individual actuarial stability.

Friday’s Order and Its Implications

Last Friday’s directive underscored Citizens’ overemphasis on “overall actuarial soundness,” rather than focusing on individual policy soundness. The order raised concerns about the justification of rate increments in certain state regions. The Office of Insurance Regulation remarked, “Due to Citizens’ inadequate competition with private insurers, rates might need a “modified policyholder capping methodology.”

This methodology might result in various outcomes, from a 12% rate increase for some primary residence policies to potential zero hikes for others. It’s important to note that rates for non-primary residences can rise up to 50% as per a law enacted the previous year.

Timeline for Proposed Increases

Although Citizens initially aimed for the rate increment to commence on Nov. 1, they later revised this to Dec. 9 – a change that received the Office of Insurance Regulation’s endorsement. Friday’s order has set a 30-day window for Citizens to revisit their rate proposal.

Additional Rate Approvals

The Office of Insurance Regulation, in a distinct order last Friday, greenlit several rate proposals for commercial policies, including those for condominium associations:

  • An average state-wide hike of 9.2% was sanctioned for condominium-association multi-peril policies, effective from Oct. 1.


Amidst private insurers abandoning policies and imposing extensive rate hikes due to fiscal challenges, Citizens has expanded rapidly in the past three years. Nevertheless, state authorities have consistently aimed to transfer policies from Citizens to the private sector, majorly due to the financial dangers posed by potential hurricanes. For more detailed insights on Florida’s insurance landscape, visit the state Office of Insurance Regulation website.

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