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<p class="MsoNormal"><span style="color:#1F497D">FYI – thanks to Jay Mussman<o:p></o:p></span></p>
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<b><span style="font-size:12.0pt;font-family:"Times New Roman",serif;color:#1F497D">Scott P. Pence | Carlton Fields</span></b><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D"><o:p></o:p></span></b></p>
<p class="MsoNormal" style="text-autospace:none"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:#1F497D">Board Certified in Construction Law by The Florida Bar<o:p></o:p></span></p>
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<p class="MsoNormal"><b>From:</b> Mussman, Jay D. <jmussman@daypitney.com> <br>
<b>Sent:</b> Wednesday, December 12, 2018 1:34 PM<br>
<b>To:</b> Pence, Scott <spence@carltonfields.com><br>
<b>Subject:</b> FW: Press Release: Citizens Board approves 2019 rate recommendations<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Please share</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Thank you</span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Regards</span><o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:12.5pt;color:#003366">Jay D. Mussman | Attorney at Law |
</span><a href="http://www.daypitney.com/professionals/M/Mussman-Jay-D"><span style="font-size:12.5pt;color:blue">Attorney Bio</span></a><span style="font-size:12.5pt;color:#003366">
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<br>
</span><span style="color:#1F497D">Mizner Park Office Tower | 225 NE Mizner Boulevard, Suite 350 | Boca Raton FL 33432-4078<br>
t (561) 537 4934 | f (561) 952 4267 | m (561) 862 8107<br>
</span><a href="mailto:jmussman@daypitney.com"><span style="color:#003366">jmussman@daypitney.com</span></a><span style="color:#1F497D"> |
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<p class="MsoNormal" style="margin-left:.5in"><b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma",sans-serif"> Newsroom [<a href="mailto:Newsroom@citizensfla.com">mailto:Newsroom@citizensfla.com</a>]
<br>
<b>Sent:</b> Wednesday, December 12, 2018 1:16 PM<br>
<b>To:</b> Newsroom<br>
<b>Subject:</b> Press Release: Citizens Board approves 2019 rate recommendations</span><o:p></o:p></p>
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<p class="MsoNormal" style="margin-left:.5in"> <o:p></o:p></p>
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<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">FOR IMMEDIATE RELEASE</span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">December 12, 2018</span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">Contact: Michael Peltier</span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">850.513.3774</span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">850.264.7702 (cell)</span><o:p></o:p></p>
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<p class="MsoNormal" align="center" style="margin-left:.5in;text-align:center"><b><span style="font-family:"Times New Roman",serif">Citizens Board approves 2019 rate recommendations
</span></b><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><b><span style="font-family:"Times New Roman",serif"> </span></b><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">MAITLAND, FL – Citizens Property Insurance Corporation’s Board of Governors on Wednesday approved a 2019 rate package that reflects the continued impact of runaway litigation costs
driving up rates across the state. </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">Despite initiatives to reduce litigation and costs for nonweather water losses, Board members approved recommended rates for 2019 that call for a statewide average increase of 8.2 percent
for personal lines policyholders – homeowners, condominium owners and renters. </span>
<o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">The rates, if approved by the Florida Office of Insurance Regulation, will be effective for new and renewal policies beginning September 1, 2019. Citizens is required by law to recommend
actuarially sound rates while complying with a legislative glide path that caps rate increases at 10 percent, excluding coverage changes and surcharges.
</span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">Since 2013, Citizens has experienced a surge in nonweather water losses – broken pipes, leaky washers, etc. – and litigation surrounding those nonhurricane related claims, especially
in South Florida. Such losses have forced the state’s insurer of last resort to dip into surplus for each of the past four years, a trend that is projected to continue in 2019.</span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">“Unfortunately, our customers are paying the price for these exaggerated losses,” said Gary Aubuchon, Interim Chairman of Citizens Board of Governors. “The unnecessary increase in litigation
continues to take a toll.”</span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">For 2019, the recommendation would increase rates for 97 percent of homeowners with multiperil policies. In 2015, Citizens approved rate decreases for 70 percent of its multiperil homeowners
policyholders. </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">Litigation is the key driver. Despite a policy count reduction of more than 56 percent since 2013, the number of lawsuits filed against Citizens grew from 9,146 in 2013 to 10,357 for
the first nine months of 2018. Private insurance companies have seen litigation nearly triple to 53,160 cases during that same period. If litigation were to return to pre-2013 levels, nearly all Citizens multiperil policyholders would see rates decrease.</span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt;color:black">Originally created to protect homeowners in legal matters against their insurers, Florida’s well-intentioned one-way attorney fee statute has been expanded by the courts
to produce an uneven playing field in disputes between insurance companies and other businesses.</span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt;color:black"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">Abuse of Florida’s well-intentioned assignment of benefits law has also had an impact. Through September 2018, Citizens has received 2,617 AOB-related lawsuits for the year, up from
860 in 2013 and on track to surpass a 2016 peak of 3,242. (<span class="MsoHyperlink"><span style="color:#0065A4"><a href="https://www.citizensfla.com/documents/20702/8876087/20181212+03A+Presidents+Report+2018.pdf/c2879444-da85-4a3b-9d5e-2af9165abb7d"><span style="color:#0065A4">See
President’s report, Page 7.</span></a></span></span>)</span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt;color:#333333"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">The 2019 recommendations take into account policy language changes that became effective on August 1, 2018. Citizens actuaries factored in anticipated savings from Citizens’
<span class="MsoHyperlink"><span style="color:#0065A4"><a href="http://www.citizensfla.com/mrp"><span style="color:#0065A4">Managed Repair Program</span></a></span></span>, which is expected to reduce litigation costs surrounding nonweather water loss claims.<span style="color:#333333">
</span>The changes reduced Citizens indicated rate need - the increase necessary for Citizens rates to become actuarially sound – by 19 percent.
</span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt">Citizens has prepared a<span style="color:#0065A4">
<span class="MsoHyperlink"><span style="color:#0065A4"><a href="https://www.citizensfla.com/documents/20702/7538469/20181210+2019+Rate+Kit/b803cc29-8c7e-4b7e-a6e9-3154c56eca83"><span style="color:#0065A4">2019 rate kit</span></a></span></span></span> to provide
members of the media with information about its 2019 rate filing, including <span class="MsoHyperlink">
<span style="color:#0065A4"><a href="https://www.citizensfla.com/documents/20702/7538469/20181210+County+by+County+rate+filings/4fc7f87e-ad21-4339-9c66-6da070c827ad"><span style="color:#0065A4">county-by-county estimates</span></a></span></span><span style="color:#0065A4">
</span>for particular policy types. Additional information and answers to common questions about Citizens' rates and premiums are available in the included
<i>2019 Rates Frequently Asked Questions</i>. The kit also includes additional information about Citizens' costs and projected rate need for 2019. </span><o:p></o:p></p>
<p style="margin-left:.5in;background:white"><span style="font-size:11.0pt"> </span><o:p></o:p></p>
<p class="MsoNormal" align="center" style="margin-left:.5in;text-align:center"><span style="font-family:"Times New Roman",serif">###</span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:12.0pt;font-family:"Times New Roman",serif"> </span><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><sub><span style="font-family:"Times New Roman",serif">In 2002, the Florida Legislature created Citizens Property Insurance Corporation (Citizens), a not-for-profit alternative insurer, whose public purpose is to
provide insurance to, and serve the needs of, property owners who cannot find coverage in the private insurance market.</span></sub><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif"> </span><o:p></o:p></p>
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