(AP) — A task force looking to return Citizens Property Insurance Corp. to its original status as an insurer of last resort recommended Thursday that lawmakers increase homeowner rates by as much as 20 percent.
The task force met in Jacksonville to finalize its report due Jan. 31 to the House, Senate and governor.

”Our task is giving the Legislature options,” said former Senate President Locke Burt, a task-force member.

Citizens was created by the Legislature in 2002 for homeowners who could not get insurance from other companies, but it has become the state’s largest insurer with 1.1 million policies and $412 billion in exposure. The task force was formed to recommend changes that would return Citizens to its original concept.

Earlier this month, the task force voted to recommend that the Legislature cap Citizens’ annual rate increase at 10 percent on average statewide. It also suggested an annual cap of 15 percent for any given territory and 20 percent for any single policy.

The 10 percent increase was viewed as an incremental step toward higher premiums.

Bruce Douglas, task-force chairman and a former chairman of the board of directors of Citizens Property, said without the decision to gradually increase rates that customers of Citizens would have been subjected to rate hikes of 20 to 30 percent.

Senate President Jeff Atwater, R-North Palm Beach, said he supports the incremental increases.

”We will have to allow Citizens rates to begin closer to market-driven rates,” he said. “I will do so carefully and thoughtfully so that there’s not an extraordinary knee-jerk that falls on the citizens of Florida that are so dependent on Citizens coverage.”

Citizens’ rates have been frozen for three years and task-force members are urging the state to allow Citizens to begin raising them in January 2010.

”We cannot continue on with a freeze,” Douglas said.

Citizens hopes the rate increases will force property owners to take out policies with other insurance companies and make Citizens a smaller company.

Jason Schupp, senior vice president of Zurich North America Insurance Company and a task-force member, said Citizens should be looking at “shrinking, not a growth trajectory.”

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Task force calls for Citizens Insurance rate hike for Floridians
Task force calls for Citizens Insurance rate hike for Floridians
Task force calls for Citizens Insurance rate hike for Floridians