COLUMBUS, Ohio--(BUSINESS WIRE)--Nationwide Insurance Company of Florida’s (NICOF) president today told the Florida Senate Select Committee on Property Insurance Accountability that the company has complied with House Bill 1A. The Florida Legislature enacted the bill in 2007 to lower property insurance rates for Florida policyholders. The Select Committee is holding public hearings to explore compliance with the new law.

Nationwide received an approval letter from the Florida Office of Insurance Regulation in October 2007 after the company filed a 16.1 percent “true up” decrease under the legislation.

“Without House Bill 1A, the average Nationwide homeowner customer in Florida would pay an average $448 more on their insurance premiums this year. Those are real dollars that will stay in the customer’s pocketbook,” said Jeff Rommel, regional vice president of Nationwide’s Florida operations, and president of Nationwide Insurance Company of Florida.

While an arbitration panel awarded NICOF a 54 percent rate increase in March 2007, the company’s implementation of HB1A (including the 16.1 percent “true up”) lowered the final increase to 21.3 percent. Since NICOF had not received a rate increase since 2005, the result was an average increase of just over 10.5 percent per year for 2006 and 2007. In fifty-five of 67 counties in Florida, NICOF customers now have rates lower than the industry average.

With regard to the ratemaking process, Rommel emphasized that state law requires Florida homeowner rates be based on Florida risks and that insurance companies are prohibited from using profits from one state to subsidize rates in another.

“We don’t factor into Florida rates the $100 million Nationwide paid for California wildfires in 2007, or the $300 million in non-Florida Katrina claims from 2005,” Rommel said. “We don’t factor into Florida rates Iowa fender benders or Pennsylvania home fires. And we don’t factor Florida’s hurricanes or home fires into the rates of those states.”

Rommel also corrected inaccurate assumptions that auto insurance profits in Florida are more than making up for homeowner losses.

“Simply put, those assumptions are not valid,” Rommel insisted. “Since 1988, Nationwide in Florida has lost more than $300 million in homeowners. When we factor in our auto results, the combined loss for both lines in Florida is more than $150 million. While we have made some money on auto, it does not offset homeowner losses.”

He also acknowledged the frustration expressed by lawmakers and customers and reemphasized Nationwide’s commitment to help find answers to the unique challenges facing the Florida insurance market.

“We don’t take this lightly,” Rommel added. “Nationwiders are burning the midnight oil to find solutions. It is my hope we can work together with this body and others to find answers that best serve the needs of Florida consumers.”

Nationwide Insurance employs more than 1,400 Florida residents and has 245 agents that serve more than 500,000 customers in the state. The company has served the state of Florida since 1955. Nationwide Insurance Company of Florida paid more than $1 billion in claims related to the 2004 and 2005 hurricane seasons. NICOF has lost more than $300 million since its inception in 2000.

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