CitizensFAQ

CITIZENS REFUNDS & RATES

1. What is this rate rollback & refund issue?
Citizens began using new personal residential rates effective January 1, 2007. The new legislation requires Citizens to roll back these rates to the amount charged on December 31, 2006, unless the January rate change resulted in a decrease for a policyholder. The legislation also results in a second rate reduction due to changes in the Cat fund law. Citizens will begin rolling back the 2007 personal residential rates for High Risk Accounts & Personal Lines Accounts in February. Policyholders who paid the 2007 increase will receive a refund once the rates are rolled back.

2. Who is eligible to receive a refund?
Citizens' Personal Lines Accounts & High Risk Accounts personal residential policyholders who paid a higher premium in 2007 (new or renewal business) due to the January rate increase will receive a refund check or policy credit.

3. When will Citizens' policyholders receive their refund?
Citizens anticipates sending all checks by the end of March to policyholders who qualify for a refund.

4. Why will some people get a credit?
The refund will be in the form of a policy credit if there is a balance due after the rate rollback.

5. How much of a refund should policyholders expect to receive?
It depends. The January rate changes for Personal Lines Accounts and High Risk Accounts policies varied by county and policy form. Some counties had no increase at all. Only policyholders who paid a higher 2007 rate will receive a refund or policy credit.

6. Will policyholders see any other rate decreases in 2007?
Yes. Citizens will introduce a rate reduction of at least 5 percent (due to Cat fund changes) for personal and commercial residential policies beginning in March. Citizens' policyholders who paid a higher rate in 2007 (new or renewal business) prior to the rate reduction will receive a refund check or premium credit. Policyholders who have neither renewed nor paid the higher rate will see a lower rate at their next renewal.

7. If a Citizens' policyholder receives a renewal bill showing a higher premium due to the January 1, 2007 rate increase, should she pay that bill?
Yes. To prevent cancellation, the policyholder should pay the invoice. Citizens will either send a refund or reduce the amount due on the policyholder's next installment.

8. Will Citizens make a special exception for March 2007 renewals?
Yes. Although policyholders with March renewal dates will receive premium notices showing a March due date for payment, Citizens is allowing a grace period until April 16' for payment to be received. This applies to March renewals only.

9. Where will Citizens send refund checks for policies paid through an escrow account or Premium Finance Company (PFC)?
Personal Lines Accounts premium refunds for escrow-billed policies are mailed directly to the named insured. Personal Lines Accounts refunds for premium-financed policies are mailed to the PFC listed on the account. All High Risk Accounts premium refunds are mailed directly to the named insured. CLA refunds for premium-financed policies are mailed to the PFC listed on the account.

10. How will endorsement requests be handled for policies with effective dates from January 1, 2007 -March 31, 2007?
Citizens has placed a temporary hold on processing endorsements and cancellations for new or renewal policies with effective dates from January 1,2007 through March 31, 2007 until all rate rollback refunds are completed.

11. Will Citizens offer semi-annual and quarterly payment options?
Yes. Citizens is required by law to have a payment plan option in place by July 1, 2007.

12. How has the new law changed eligibility for Citizens policyholders?
An existing Citizens' policyholder now has the choice to stay with Citizens, even if they have an offer of coverage from another insurer.

13. What is the 25%+ rule and how does it affect eligibility?
A consumer who wants to apply for a Citizens' policy is eligible if an offer of coverage exists from an authorized insurer using rates approved by the Florida Office of lnsurance Regulation (OIR). The new legislation created an exception: A consumer is eligible for Citizens (subject to underwriting criteria) if an offer of coverage exists from an authorized insurer using approved rates that are more than 25% higher than the Citizens' premium for comparable coverage. This rule applies to both personal and commercial policies

HOMESTEAD CHANGES

14. Is it correct that homestead property and nonhomestead property are both now equally eligible for Citizens?
Yes.

15. Do agents still need to verify a property's homestead status?
Yes. The agent must still have the property owner verify the homestead status using the HS-1 form, update the homestead status with Citizens, and retain the completed form for audit purposes.

16. Why do I have to complete the Affirmation of Homestead Eligibility (HS-1)?
For assessment purposes. Beginning in 2008, nonhomestead policyholders could be assessed up to 10% of the policy premium if Citizens has a deficit. This assessment would be in addition to the amount assessed to all policyholders.

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