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Florida Administrative Code (Last Updated: October 28, 2024) |
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69. Department of Financial Services |
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69O. OIR – Insurance Regulation |
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69O-170. Property And Casualty Insurance Rating |
1(1) For purposes of determining whether there is a reasonable degree of competition in the personal residential property market in Monroe County, the Office shall:
26(a) Review the respective market share of all insurers, including Citizens Property Insurance Corporation using the number of policies issued for each line of personal residential insurance policies as most recently reported pursuant to Section 61624.424(1), F.S.;
63(b) Calculate a Herfindahl Index for Monroe County.
711. If the Herfindahl Index exceeds 1000, the Office shall consider the Herfindahl Index to be a significant indication of a noncompetitive market in that county. 97The formula for this index is: 103H = (%S1)1062 107+ (%S2)1092 110+ (%S3)1122 113+…(%Sn)1142115. %S 117stands for the percentages of the market owned by each of the larger companies, so that 133%S1 134is the percentage owned by the largest company, %S1432 144by the second, and so on. 150n 151stands for the total number of companies you are counting.
1612. The Herfindahl Index gives added weight to the biggest companies. The higher the index, the more concentration and (within limits) the less open market competition. A monopoly, for example, would have an H index of S11982 199or 1002012, 202or 10,000. By definition, that's the maximum score. By contrast, an industry with 100 competitors that each has 1% of the market would have a score of 12312 232+ 12342 235+ 12372 238+ ...12402 241or a total of 100. A 1,000-1,800 value generally indicates moderate concentration. Anything over 1,800 is taken to be token acute concentration; 266and
267(c) Review any other information related to and associated with evaluating market competition for that county, such as entry and exit of insurers into the market, trends in the market share of insurers and the number of new policies being issued.
308(2) Upon finding that Monroe County does not have a reasonable degree of competition for any line of personal residential property insurance, the Office shall request Citizens Property Insurance Corporation to make a rate filing that is applicable to that line of business and that is actuarially sound and not excessive, inadequate, or unfairly discriminatory and is in compliance with Section 369627.062, F.S., 371and the applicable provisions of Section 377627.351(6), F.S.
379Specific Authority 381624.308(1), 382627.351(6)(d)4. FS. 384Law Implemented 386627.351(6)(d)4. FS. 388History–New 6-1-06.
