Monetary Stability Rankings (FSR) are what enable insurance coverage firms to function in Florida. However in response to the Insurance coverage Info Institute (Triple-I) many insurance coverage brokers can solely market and write insurance policies for firms with “A” rankings.
Firms issued with an “NR” (No Ranking) are at excessive threat of coming into receivership with the state.
Mortgage suppliers similar to Fannie Mae and Freddie Mac additionally require owners to have an insurance coverage coverage with an A-rated firm. WFLA reported that anybody with a coverage with any of the 17 firms liable to downgrade could also be pressured to seek out new protection.
Florida chief monetary officer Jimmy Patronis had written letters to each mortgage financers, in addition to the Federal Housing Finance Company, expressing his issues about their reliance on Demotech’s rankings, WFTS reported.
There’s some pushback to Demotech’s choice to decrease the rankings. OIR commissioner David Altmaier wrote a letter to Demotech president Joe Petrelli, requesting that the company “carry out a extra complete assessment” of score downgrades.
“As such, we’ve endeavored to make sure that Demotech is ready to derive its rankings primarily based upon the constant and goal utility of its personal requirements,” Altmaier wrote in his letter. “Nonetheless, as OIR learns extra in regards to the discover letters despatched to firms, and contemplating the affect these actions would have on tens of millions of Floridians, numerous jobs, and Florida companies, this sort of unilateral motion warrants additional scrutiny.
“OIR is compelled to take the extraordinary step of scrutinizing these unprecedented actions to guard the Floridians we serve, particularly two months into hurricane season.”
Altmaier additionally decried the rankings downgrade as “an instance of inconsistent, monopolistic energy of a choose score company,” and requested Demotech to offer insurers with a path for assessment or attraction of the downgrades.