Florida
Insurance Council backs off on
court
challenge to cancellation ban
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Article Courtesy of The Sun Sentinel
By Kathy
Bushouse
Published February 20, 2007
The
Florida Insurance Council ended its legal challenge to an emergency state
order that temporarily stops property insurers from dropping policies or
raising premiums before provisions in Florida's new insurance law takes
effect.
The insurance trade group stopped its fight because a new directive issued
Monday by Insurance Commissioner Kevin McCarty clarified some of the
group's questions so "we did not see a need to continue the legal
challenge," said Sam Miller, executive vice president of the Florida
Insurance Council.
The state's emergency order still prohibits insurers from raising rates
and dropping customers before provisions of the new insurance law take
effect June 1, but McCarty's order clarifies that insurers will be able to
drop customers to reduce their hurricane exposure if certain conditions
are met. Insurers will be able to jettison customers' property policies if
they first file for lower rates with the state Office of Insurance
Regulation and give their customers 100 days notice, according to the
order.
All insurers are required by McCarty's order to file new rates with the
state by March 15 and have them in effect by June 1. Property owners
should expect to see savings when they renew their insurance policies, and
some customers of Citizens Property Insurance Corp. will receive refund
checks.
"The Florida Legislature's goal was to provide immediate rate relief
for Floridians," McCarty said Monday in a statement. "The
discounts to be included in these rate filings are a significant step in
alleviating the financial burden on Florida's policyholders."
Last week, the insurance council challenged the emergency order approved
Jan. 30 by Gov. Charlie Crist and the Florida Cabinet because the group
contended the order was overly broad and overreaching. It filed its
objections with both the First District Court of Appeal in Tallahassee and
with the state's Department of Administrative Hearings, and both those
challenges will be dropped, Miller said.
The news may not be as good for some customers of Allstate Floridian
Insurance Co. Once the St. Petersburg-based insurer submits revised rates
to state insurance officials, the company will be able to move ahead with
already announced plans to drop 106,000 home and condo policies and offer
customers new coverage with Royal Palm Insurance Co., a new insurance
company in Ormond Beach.
"There was a lot of confusion out there before [McCarty's] order came
out," said Allstate Floridian spokesman Adam Shores. "So to the
extent that there is more clarification, we obviously think that is a good
thing."
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