After the Florida Senate Select Committee on Property Å˽ðÁ«´«Ã½Ó³» Accountability heard testimony from The Hartford and Florida Farm Bureau Tuesday, Sen. Steve Geller, D- Hallandale Beach, said the final group of the day, American Strategic Å˽ðÁ«´«Ã½Ó³», “will leave us with a good taste in our mouth.”
American Strategic Å˽ðÁ«´«Ã½Ó³» Co., was held out in front of the Senate committee like a hero in a white hat who galloped into the chambers to save the day. As senators tripped over each other to praise the 10-year old domestic insurer, others offered caveats.
While agreeing that the senators’ compliments of ASI are valid, Jeff Grady, president of the Florida Association of Å˽ðÁ«´«Ã½Ó³» Agents, said the insurance company is its own managing general agency and, as such, garners $25 per policy in addition to the allowed 3.7 percent profit on premium, based on the Florida Office of Å˽ðÁ«´«Ã½Ó³» Regulation presumed factor calculations.
The $25 per policy – adding up to $6.25 million – was not discussed at the hearing. And while ASI said it has approximately 250,000 policyholders throughout the state, company officials also said that they have topped out at that number, not planning to stretch their capabilities any further in the Florida market.
The OIR approved two ASI rate increases totaling 39.5 percent in 2006 prior to the passage of HB1A in January 2007, prompting committee member Sen. Ted Deutsch, D-Delray Beach, to ask ASI CEO John Auer if the company’s current good standing was a matter of timing.
Auer said his company has always had a practice of keeping up to date with current expense needs.
Auer told the committee that his company is profitable and healthy, but that only 4 percent of his company’s policies are written in Broward, Miami-Dade and Palm Beach Counties, consisting of 6 percent of the firm’s exposure.
Still, the senators made no bones about expressing their admiration to Auer for apparently following the mandates of HB1A to a “t”.
Two days after the HB1A became law on Jan.31, 2007, ASI submitted a rate filing increase of 3.7 percent – the OIR’s approved profit margin based on presumed factor calculations. In September 2006 when it came time to file the true-up rating, ASI decreased rates another 9 percent.
Auer said his company does not use a short or near term forecasting model anywhere in its rate determination process – a hot button issue with the other insurance company executives who testified in Tallahassee this week.
Topics Florida
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