State to verify the insurance claims through the storm to deal with the risk of download [South Florida Sun-Sentinel]

State to verify the insurance claims through the storm to deal with the risk of download [South Florida Sun-Sentinel]

Florida Homeowners will not lose the insurance Study or the face is forced to put a plan if the insurance loses money calm Votes – at least through the hurricane season.

Florida Office of Insurance Regulation today announced that the government, through Florida Insurance Guaranty Association and the government Opinions of the company Citizens Property Insurance Corp., will provide a 100% backstop service for any unpaid claims and lost insurance. This temporary program will be active through the hurricane season, which ends Nov. 30.

In a press release, the bureau said the bond meets the requirements for lending to borrowers with government-backed loans. Fannie Mae and Freddie Mac that borrowers must maintain security and insurance policies with A.

If the insurance rating drops below A, Fannie Mae and Freddie Mac required lenders to rent a forced-premises expensive study on the property if the landlord can not immediately buy A-rated instead of the policy. Fannie Mae and Freddie Mac pay off more mortgages Florida and the whole world.

But Fannie Mae and Freddie Mac each provides an exception “to the insured who assumes, by acceptance, 100 percent of the insured’s liability for any loss that is paid, but not paid by the insured, due to failure,” according to the release.

“This new arrangement meets the requirements set forth by the second home market,” Florida Insurance Commissioner David Altmaier he said upon release.

“If we want to use this option temporarily, consumers won’t have to look elsewhere for coverage, agents won’t have to move policies, and borrowers can be confident that these insurers will continue to meet mortgage eligibility.”

The plan, which creates what is known in the insurance industry as “excessive endorsements,” is “an excellent solution to a very disruptive problem that will affect millions of policyholders,” he said. Paul Handerhana resident of Federal Association for Insurance Reforma Fort Lauderdale-a consumer watchdog group.

“Excessive approvals” are used “when you have a company that is at risk of credit,” he said. “You can buy a policy that will ensure you meet the policy’s requirements.”

In this case, a number of events must take place for the government to recover all the damage, said Handerhan.

First, the financial stability of the insurance company must be reduced. Second, the company must be insolvent. Third, the company must have open and available claims.

Under the existing protection, a Florida Insurance Guaranty Association it is required to pay each person’s losses $500,000.

An additional level of security would make citizens liable for any losses incurred $500,000.

Citizens, government insurance of last resort, currently $6.7 billion in reserves and reinsurance, $11.3 billion on the ability to pay debts, a citizen spokesperson Michael Peltier he said.

So while the chance that the government will have to pay the extra money is slim, the program is guaranteed to do so Fannie Mae and Freddie Mac that their property back is 100%.

“It gives borrowers confidence that at the end of the day, they’re going to recover,” Handerhan said. “There’s no need to impose mandatory policies if the claims are proven by the government.”

Altmaier’s office announced the program because of a crisis caused by a letter from the accounting firm Demotech notifying 27 Florida insurers that their A ratings, which stand for Exceptional or Unsurpassed, had been downgraded. July 26. The reduction would put hundreds of thousands or possibly millions of homeowners out of compliance Fannie Mae and Freddie Mac loans.

Altmaier is Chief Financial Officer Jimmy Patronus publicly released letters on Thursday explosion Demotech and want to know if Ohio-based firm was based on its decision on the overall assessment of the health insurance market in Florida and not the quantitative method that has been used in the past.

Monday, CEO of Demotech Joe Patronus announced that it was delaying decisions to downgrade or affirm insurance ratings while it reviewed other offerings from affected insurers.

Demotech also sent a lengthy response to the bureau outlining its methods and arguing that it has not abandoned its old method of evaluating the financial stability of companies.

In today’s release, the office accepted Demotech’s response but said it did not provide a schedule of its decisions.

“Sudden loss of legitimate wealth [Stability] The audit could have a significant and negative impact on Florida insurance consumers, insurers, agents and the property insurance market. OIR remains committed to protecting Floridians and the property insurance market under this plan,” the release said.

Ron Hurtibise covers business and consumer issues of South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].

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