Plan to have Anchor policies replaced by HCI gets approval

In an effort to facilitate a smooth continuance of insurance coverage to policyholders, Florida Insurance Commissioner David Altmaier has approved a plan for Homeowners Choice Property and Casualty Insurance Co. (HCI) to provide replacement policies for Anchor Property and Casualty Insurance Co. policyholders.

According to a Feb. 17 press release, the consent order approving the coverage transition guarantees policyholders will have access to insurance coverage from HCI and not experience any lapse in coverage.

“OIR thoughtfully and carefully reviews these agreements to ensure policyholders are protected,” Insurance Commissioner David Altmaier said in a press release. “I am committed to ensuring policyholders have continuous coverage throughout this process and have directed insurers to communicate clearly and use every resource to help them navigate this change.”

All Anchor policyholders in Florida will be receiving a notice that their current policy is cancelled, effective April 1, 2020. Along with the notice, Anchor will include an offer letter and declarations page from HCI providing details on the new policy that will also take effect April 1.

The new policy will cover what’s left of the original Anchor policy period with similar coverage and rates. This transition will require no action on the part of the policyholder aside from paying any premiums that are due. Policyholders should also note that premiums already paid to Anchor will be automatically transferred to HCI.

If any policyholder opts to decline HCI’s replacement policy, they should look for new alternatives from their current insurance agent or other insurance companies and ask for unearned premium to be reimbursed no later than Tuesday, March 31.

When the replacement policy expires, eligible policyholders will have the option of renewing their policy with HCI. Should there be a difference in coverage terms or policy rates, HCI will inform policyholders by sending a notice detailing the changes.

The announcement comes after much coverage of the concerns over the financial stability of property insurance providers in Florida. Last month, Demotech Inc., a consulting firm that rates insurance companies based on financial stability, announced that more than a dozen Florida insurers are in jeopardy of being downgraded.

The downgrade would mean a loss of the ‘A’ ratings required by federal lending agencies Fannie Mae and Freddie Mac, and could mean that policyholders would be forced by the agencies to find new insurance carriers or assigned new carriers, resulting in higher policy rates. The only other alternative would be for customers to buy policies from Citizens Property Insurance Corp., which is run by the state.

Last year, insurers in Florida sought to increase coverage rates for homeowners policy rates in the state. Velocity Risk Underwriters, a leading insurance carrier, asked for a rate hike of over 28 percent in their Voluntary Homeowners Program.

The reality of potential rate hikes, downgrades and the liquidation of Florida Specialty Insurance Co. created a sense of panic among Florida homeowners.

In fact, 80 percent of insurance filings between June and December 2019 were requests to increase coverage rates, with 55 percent asking for a double-digit increase, further troubling Floridians.

Approximately 43,000 policies across Florida are affected by the recent consent order.

The Florida Office of Insurance Regulation (OIR) is responsible for regulation, compliance and enforcement of statutes associated with insurance and the monitoring of industry markets.

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