Insurer Heritage withdraws 14.9% hike questioned as ‘greedy’

Article Courtesy of The Palm Beach Post

By Charles Elmore

Published July 8, 2016

 

In an unusual move, one of Florida’s largest insurers has withdrawn its request for a 14.9 percent rate increase scrutinized by Palm Beach Post reporting and questioned by homeowner advocates as “greedy.”

Heritage Property & Casualty Insurance Co. chose to withdraw the filing for 2017 rates after regulators held “discussions” with the company on unspecified “items within the filing,” Amy Bogner, spokeswoman for the Office of Insurance Regulation, said Tuesday.
   

“The 0ffice has undertaken a thorough review of the rate filing submitted by Heritage Property & Casualty Insurance Co. and held productive discussions with the company to address various items within the filing,” Bogner said. “The outcome of this review has resulted in Heritage electing to withdraw the filing at this time. The office looks forward to working with Heritage when it resubmits the filing again and to address any concerns that may arise on behalf of the consumers of Florida.”

Attempts to reach Heritage officials for comment were not immediately successful.

The Palm Beach Post reported the insurer’s claim losses had been falling as a share of premiums, even as Heritage Insurance Holdings Inc. CEO Bruce Lucas nearly quadrupled his compensation in one year to $27.3 million.

That was more than 50 times what the CEO gets paid at larger, state-run Citizens Property Insurance Corp., where Heritage got most of its customers on its way to becoming one of the state’s five largest property insurance carriers.

“Your loss ratio is going down, you’re paying your executive $27 million — how do you justify a 15 percent rate increase without just saying ‘we’re being greedy’?” said Ken Schurr, a Coral Gables attorney who represents policyholders against insurance companies.

The requested increases would have raised rates 22 percent to 25 percent in Palm Beach County.

Heritage, a four-year-old company, has grown rapidly to become one of the state’s largest property insurers.

Heritage, a four-year-old company, has grown rapidly to become one of the state’s largest property insurers.


    
Florida Insurance Consumer Advocate Sha’Ron James had requested a hearing on the proposed increase, though regulators had not announced one before Tuesday’s deadline to decide on the rate request. Regulators are not required to hold hearings on increases less than 15 percent.

Heritage, a 4-year-old company, has grown rapidly to become one of the state’s largest property insurers largely by taking customers from Citizens. Transfer offers automatically switch homeowners unless they take steps to decline. Fewer than 16 percent of Heritage’s 266,000 customers have been “voluntary,” meaning they arrived on their own, and not through a state-assisted switch, according to company disclosures.

Heritage contributed $110,000 to Gov. Rick Scott’s Let’s Get to Work committee and got a sweetener payment up to $52 million that most other insurers did not receive to take Citizens customers in 2013, The Post reported.


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