Current through Reg. 50, No. 187; September 24, 2024
(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:
(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
624.424(1),
F.S.;
(b) Calculate a Herfindahl
Index for Monroe County.
1. 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. The formula
for this index is: H = (%S1)2 +
(%S2)2 + (%S3)2
+...(%Sn)2. %S stands for the percentages
of the market owned by each of the larger companies, so that
%S1 is the percentage owned by the largest company,
%S2 by the second, and so on. n stands for the total
number of companies you are counting.
2. 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 S12 or
1002, or 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 12 +
12 + 12 +
...12 or 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; and
(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.
(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
627.062, F.S., and the
applicable provisions of Section
627.351(6),
F.S.
Rulemaking Authority 624.308(1), 627.351(6)(d)4. FS. Law
Implemented 627.351(6)(d)4. FS.
New 6-1-06.
