No one knows which of the 16 — or 27, depending on some reports — Florida insurance companies are expected to take a cut from Demotech, a Columbus, Ohio-based financial research and analysis firm.
Mortgage lenders Fannie Mae and Freddie Mac require homeowners to have a policy with an A-rated company. These homeowners, whose ratings go down, are forced to get new insurance, either at a higher cost, or face the risk of defaulting on their mortgage.
About 65 percent of Florida’s policyholders say they have personal loan insurance.
Demotech it suspended its announcement last week after a major outcry from state leaders, and the Florida Office of Insurance Regulation stepped in to announce a plan to “rescue” companies on the winning list by providing reinsurance services through the state’s Citizens Property. Insurance.
Joe Petrelli, president of Demotech, said in a statement that the audit has been delayed while the company conducts further negotiations with stakeholders.
“As the current situation has been brutal and negative and we have put a lot of effort into developing responses to other people’s letters, we will be taking additional time to review the information and consider the issues affecting companies operating in Florida,” Demotech’s voice was recognized.
Petrelli did not say when the votes would be released but said they would all be posted at the same time. However, in some revisions, a major revision of the ratings may not take place at all.
“It is not appropriate to review potential actions based on dissatisfaction with the outcome or threats, including the threat of legal action,” Petrelli said in the statement.
Other insurance companies across the country, such as Frontline Insurance of Lake Mary, sent messages to its customers saying: “Know that we have more money, we have more insurance, and we are doing better than our peers,” said CEO of Frontline Leman Porter.
“This is a political issue being played out between Demotech and the Florida Legislature, as well as between Demotech and Fannie Mae/Freddie Mac to get Demotech’s ‘S’ approved. We have inadvertently been caught in the crossfire and will move past this to continue to do well in the market as soon as possible,” the company said in a statement. his words.
According to the report of Insurance JournalThe dispute began last week after 17 property insurers received a letter from Demotech, informing them that their financial strength will soon be changed from “A Exceptional” to “S Substantial” or “M Moderate.”
Any rating lower than an “A” is not acceptable to second-loan lenders, and could mean millions of Floridians will lose the mortgage insurance they need.
The Florida Association of Insurance AgentsFlorida’s finance director and state insurance director both responded quickly.
FAIA President Kyle Ulrich, in a blog post, questioned Demotech’s intentions and urged state leaders and insurers to find an alternative accounting method. CFO Jimmy Patronis asked creditors to reconsider how they use the company’s ratings. And Commissioner David Altmaier, in a letter to Demotech, faulted the company’s approach and said it didn’t follow strict standards, Insurance Journal reported.
This week, Jacksonville-based Southern Oak became the 17th insurance company in the state to drop a policy, go public, or declare bankruptcy.
Southern Oak says it has set a limit of $250,000, will only list new plans for buildings built this year, and will not list plans in 10 states, which were not named.
Meanwhile, you can check the ratings of the insurance provider right now from Standard and Poor’s Ratings, and click here or call 212-438-2400.