Demotech informs 17 property insurance companies about the price drop

Florida insurance agency Demotech has notified about 17 property insurance companies that their ratings will be downgraded when they review their 2022 hurricane protection renewal packages, according to a letter from the Florida Office of Insurance Regulation (OIR).

OIR Commissioner David Altmaier sent a letter to Demotech President Joe Petrelli on Thursday strongly requesting that the agency conduct a “comprehensive review” of the price cuts. According to the letter, Demotech informed 17 domestic companies that their ratings have been downgraded from “A” for “Exceptional” to “S” for “Severe.”

These numbers are Financial Stability Ratings (FSR) that do not allow companies to operate in the state, and, most agents in Florida only sell and write policies for organizations with an “A” rating, according to the Insurance Information Institute.

In a May interview with the Insurance Information Institute about FedNat’s downgrade, spokesman Mark Friedlander explained why it hurts the company.

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“This prevents them from insuring homes with federal mortgages and in some cases will prevent independent agents from representing them. They will no longer be able to sell their products to their clients because often independent agents only represent the companies they rated. In other words, it will stop their business. It is not a model that it’s sustainable,” Friedlander explained.

Altmaier wrote:

“Therefore, we have worked hard to ensure that Demotech is able to get its vote based on the circumstances. OIR is being forced to take unprecedented action to protect the Floridians we serve, especially two months after the hurricane. It is an example of the unbiased, independent powers of the election agency. money and is trying to galvanize Floridians and policy makers by trying to block public policies based on his ideas.

Altmaier says there are contradictions in the commission’s actions and asks that the commission answer them and allow the companies to appeal its decision, “as they agree in the process sent by Demotech.”

Commissioner Altimaier is also asking Demotech to give companies a way to review or appeal these proposals.

We reached out to Demotech representatives for comment on Thursday evening. We haven’t heard back yet.

In a statement from the Insurance Information Institute Thursday evening, Friedlander said:

“The market reaction to the special legislative event has been very negative as seven insurers have suspended registration of new business in Florida since the end of May and the international reinsurance market has also been very negative, criticizing the legislature for not taking strong action to stop contractual policies and lawsuits most of which is being offered to Florida insurers.”

Florida Association of Insurance Agents President Kyle Ulrich also responded to Demotech’s decline in blog on their website.

In it, Ulrich said: “We are going back. In the letters received by FAIA, Demotech informed many carriers to reduce the rating of the company from “A Exceptional” to “S Substantial.” Also included were the July publications. 26, 2022, trying to explain Demotech’s work in the Florida market, recent events, and regulatory changes, is that all “carrier Financial Stability Ratings (FSRs) have now been updated” on their website. Florida’s insurance market valuation is about to happen.”