TAMPA, Fla. (WFLA) — The anticipated ratings downgrade of more than a dozen property insurance companies that experts have warned would cause financial chaos in Florida will not be happening as early as originally planned, 8 On Your Side has learned.
The Florida Office of Insurance Regulation said last week that 17 property insurance companies total would likely be downgraded on Tuesday, July 26 by the rating agency Demotech. However, 8 On Your Side Investigator Mahsa Saeidi learned Monday that the downgrades will not happen on that date, according to Demotech.
“We are changing our deadline,” Demotech President Joseph L. Petrelli said.
Meanwhile, 8 On Your Side has learned Frontline Insurance is one of 17 companies that could have their ratings downgraded.
The state has not yet disclosed the full list of companies. However, two industry insiders tell 8 On Your Side Frontline Insurance is on the list, sharing a letter from the company’s CEO Leman Porter.
In the letter, Mr. Porter writes, “Frontline was notified that we are one of the 17, along with other well-known Florida-based carriers, that would be changed from an A to an S.”
In the letter, Mr. Porter states Frontline is financially strong.
“Rest assured we are in great financial shape, have plenty of reinsurance, and are doing better than our peers. This is a matter of politics being played out between Demotech and the Florida legislature, and between Demotech and Fannie Mae/Freddie Mac to get Demotech’s S rating accepted. We unknowingly have gotten caught in the crossfire and will move past this to continue our success in the marketplace shortly. We will keep you apprised of any updates, and an email will be sent out early next week detailing the current state of the situation and how we’ve progressed.”Frontline Insurance CEO Leman Porter
“Frontline is not taking this news sitting down,” Porter added in his letter. “We will be appealing this action and seeking a stay of rating change through legal remedies.”
8 On Your Side reached out to Frontline for comment.
Industry experts say the potential downgrades of the insurance companies will impact hundreds of thousands of families across Florida – including in the Tampa Bay area.
Mortgage providers Fannie Mae and Freddie Mac require homeowners to have a policy with an A-rated company. Anyone who has a policy with any of the 17 companies that could be losing its A-rating may be forced to find a new policy – potentially one that could cost more and provide less coverage.
Mahsa Saeidi is tracking this developing story. Watch her full coverage on WFLA at 4, 5 and 6 tonight.
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