Florida may see a considerable reduction from QBE following state regulator criticism.
The biggest force placed insurance company in Florida, QBE, has responded to the criticisms that it has received from regulators by making an offer to decrease its rates by 19 percent.
This could make a significant difference in the coverage and real estate marketplaces of the state.
Force placed insurance is purchased by lenders – typically mortgage lenders – on behalf of homeowners who have failed to purchase their own coverage or who have let their policies expire. The action is a part of the mortgage contract, wherein the homeowner is required to have this coverage until the home loan has been paid off. The borrower remains responsible for the cost of this policy, though this can be challenging for a lender to obtain if a foreclosure occurs.
Praetorian, a subsidiary of QBE, requested a force placed insurance rate decrease but was rejected in August.
The Florida Office of Insurance Regulation turned down the force placed insurance company’s request to lower its rates by 2.2 percent, to be applied to 115, 049 policies, as the state regulator believed that the rate decrease should have been for 35 to 36 percent, instead.
Now, the subsidiary of the force placed insurance company has made a new filing with the state OFR. In it, they have offered to slash their rates by a much more significant 19 percent. Moreover, it has also stated that it will shrink its commission to the banks that provide referrals from 15 percent, the current rate, to 11 percent.
As of yet, the OFR has not yet ruled on this most recent filing. It will need to reconsider the proposal that has been made and study the justifications that have been put forward by the insurer in order to judge its fairness.
The next largest force placed insurance company within the state, Assurant, is also expected to make a filing of a similar nature to the OFR in the near future, as the office has already requested a submission of a new set of rates from that company, as well.