2016 Rate, Rule and Form Changes
November 23, 2015 - ATB #011-15
The Florida Office of Insurance Regulation (OIR) has approved changes to the Citizens policy forms, required documents, annual rates, rules and underwriting manuals for commercial lines policies. The changes apply to new and renewal policies with effective dates on or after February 1, 2016. The major changes are outlined below.
Rate and Rule Changes
The base rate changes vary by policy type and are subject to a 10 percent cap, excluding coverage changes, mitigation adjustments, Sinkhole Loss coverage rate changes, surcharges and a required rapid cash-build-up provision for the Florida Hurricane Catastrophe Fund (FHCF), if applicable. Rating worksheets have been updated as needed.
Note: See Knowledge Base Answer ID 3008 for directions about how to locate a policy-specific rating worksheet in PolicyCenter®.
For Commercial Residential Multiperil (CR-M) policies:
- For policies that include wind coverage, Group I and Group II rating factors have been amended for Buildings, Business Personal Property, and Special Class items (excluding Group II Sinkhole).
- For policies that do not include wind coverage, new ex-wind rating tables and factors are being introduced for Group II All Other Perils and the sinkhole peril.
- The ex-wind rating tables and factors replace the current Group II AOP Base Rate Factor of 0.005 and Group II Sinkhole Base Rate factor of 0.047.
For Commercial Nonresidential Multiperil (CNR-M) policies:
- Group I and Group II rating factors have been amended for Buildings and Business Personal Property. The loss cost multiplier applicable to Specific Rated risks will increase from 3.721 to 4.053.
For Commercial Residential Wind-Only (CR-W) policies:
- Rating factors have been amended for Buildings and Business Personal Property for noncondominium (apartments, co-ops, homeowners associations, etc.), condominium, auxiliary buildings and Special Class property.
Commercial Nonresidential Wind-Only (CNR-W) policies:
- Rating factors have been amended for Buildings, Business Personal Property and Special Class items.
The following website changes have been updated:
- The Annual Rate Changes by Territory page
- Rating worksheets
Premium Development Rules
All commercial rates and rating manuals have been amended to reflect a change to the Policy Capping Ratio calculation steps. All commercial policies renewing for a second term under the renewal capping rules now will calculate the Policy Capping Ratio using the Capped Policy Premium instead of the Uncapped Policy Premium.
The CR-W Rates and Rating manual has been amended to adjust the calculation steps for the Building Code Effectiveness Grading Schedule (BCEGS) and Mitigation Discount Adjustment. The rate prior to application of the Windstorm Loss Mitigation Factor and BCEGS Factor has been named the Non-Mitigated Rate in the new and renewal item tables.
FHCF Build-up Factors
The FHCF build-up factors have increased, as shown in the chart below:
|Line of Business||Occupancy||2015 FHCF Build-up Factor||2016 FHCF Build-up Factor|
(wind coverage included)
Terrorism Risk Insurance Act for CR-M and CNR-M
The commercial multiperil underwriting guidelines manuals have been amended to reflect changes resulting from the reauthorization of the Terrorism Risk Insurance Act.
New Public Protection Classification Split Classes for CR-M and CNR-M
The Insurance Services Office (ISO) introduced new Public Protection Classification (PPC) “split” classes for CR-M and CNR-M new-business risks, which are 1Y-8Y, 1X-8X and 10W. These new classes:
- Will not impact rates.
- Will display on the Location Information screen in PolicyCenter.
- Are being integrated into our existing rate structure.
- Will update for existing policies only when the property address is retrieved for a policy change effective on or after February 1, 2016.
Refer to the Citizens PPC code pages for more information.
Notice of Change in Policy Terms
A Notice of Change in Policy Terms will be included with 2016 renewal offers. The content of each notice varies by policy form.
Agent Bulletins are provided for historical purposes only and have not been updated to include any changes that may have been made after publication. Agents can find the latest information by reviewing the applicable underwriting manuals and by logging in, then selecting Search → Search Frequently Asked Questions.