TALLAHASSEE (CBSMiami/NSF) — After pressure from Florida Chief Financial Officer Jimmy Patronis, the state-backed Citizens Property Insurance Corp. has extended a moratorium on the cancellation of policies until the end of the year because of the COVID-19 pandemic.
The moratorium, which started in March as COVID-19 began to cause massive economic problems and job losses, had been scheduled to expire Aug. 15. But in a prepared statement Saturday about the extension, Citizens Chairman Bo Rivard said COVID-19 has been a “moving target.”
“Our top priority has been and will continue to be our policyholders,” Citizens President and CEO Barry Gilway said in a statement. “This extension will provide our customers with further assurances that we have their backs during hurricane season and beyond.”
The decision came after a flurry of activity that started when Patronis, who helps oversee Citizens and the insurance industry, called Friday for extending the moratorium. In part, Patronis said policies should not be canceled during hurricane season.
“Hurricane season is just beginning to heat up and we are in the middle of an unprecedented health and economic crisis,” Patronis said Friday. “This is not the time to cancel Citizens’ home insurance policies. Citizens is the state created insurer of last resort.”
Initially, Citizens responded to Patronis’ request Friday by saying it began the moratorium in March because of a significant percentage of customer premiums not being paid on time. But Citizens said that percentage had dropped to pre-pandemic levels and stood at 7.5 percent.
Citizens on Friday did not commit to extending the moratorium and pointed to special payment arrangements it had put in place for customers.
“Specifically, we are allowing policyholders who typically pay premiums on a quarterly or annual basis the option of breaking up payments into smaller installments,” Gilway said in a statement Friday. “The message has been sent to all agents and directly to policyholders. The message is clear: Citizens remains committed to assisting our policyholders through COVID-19. If you need help, we will work with you.”
But on Saturday, Citizens announced it would go ahead with extending the moratorium on cancellations until the end of the year. Hurricane season started June 1 and will last through Nov. 30.
While policies will not be canceled in the coming months, customers will ultimately have to pay the amounts that are due.
The moratorium has coincided with Citizens seeing an increase in customers after years of a relatively stable number of policies. Citizens had about 481,000 policies Monday.
The state-backed insurer has long focused on trying to move policies into the private insurance market and maintained a year-end policy count of between 427,392 and 455,843 over the past four years, according to information that went to the Citizens board last month. But problems in the private industry, such as higher reinsurance costs, have resulted in the recent increases in Citizens policies.
Patronis appointed Rivard, an attorney, to the Citizens Board of Governors last year and later named him chairman. Both are from Panama City.
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