Citizens Property Insurance Corporation will take steps to reduce administrative expenses and review its suppliers and contracts, despite runaway inflation, to reduce costs during a turbulent time for the property insurance market in Florida, the president of the insurance said on Wednesday. society.

During a meeting of the board of directors, the president Carlos Beruff said cost-cutting action is needed as the state-owned company continues to add policies and risks, increasing the possibility that all homeowners will be hit with assessments if a large hurricane hits Florida this year.

“We just want to be creditworthy, so when a (catastrophic) event happens, we don’t stick Floridians to citizen ratings across the state,” Beruff said. “It’s my mission.”

Citizens was established in 2002 to be Florida’s “insurer of last resort” for homeowners who could not find affordable property coverage in the private market. Private insurers, however, often complain that its lower prices – Citizens’ rates cannot be increased by more than 11% per year – channel owners into the company.

If the ability of citizens to pay claims is overwhelmed by a large hurricane, assessments can be imposed on non-citizen homeowners, automatically increasing insurance premiums for Florida homeowners. This means that the more risk citizens take, the greater the risk of assessments.

Florida lawmakers have tried to reduce the number of citizen policies, which have soared to 1.5 million over the past decade, offering incentives to some companies that have taken over its policies.

But many private insurers have floundered in recent years, with many seeking large rate increases, often granted by state regulators. Others, like St. Johns Insurance Co., went bankrupt as it went into receivership in February.

Citizens has $6.5 billion in reserves and had net income of $81.1 million in 2021, although that was largely due to investment income, which covered more than $166.5 million dollars in underwriting losses, according to a statement from Citizen States.

Council members also expressed frustration with the Legislative Assembly’s inaction on property insurance during the session that ended March 14. While the Senate passed a bill (SB 1728) aimed at cutting costs and increasing premiums for insurers, including through a new deductible for roof repairs, the measure met with resistance from House leaders.

‘Until we get legislative relief… we’re stuck chasing our tails,’ a member of the Citizens board said Scott Thomas.

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