Demotech, a ratings agency for insurance companies, is set to downgrade 17 Florida property insurers, delivering another blow to an already fragile market.

It also spurred a swift response from Chief Financial Officer Jimmy Patronis and the Office of Insurance Regulation, which blasted the decisions.

Patronis called Demotech a “rogue ratings agency” playing “havoc with the financial lives of millions of Floridians,” in a letter to the leaders of the Federal Housing Finance Agency, Fannie Mae and Freddie Mac, government-backed groups that guarantee mortgages.

Demotech is the only agency that rates domestic Florida insurers, so Fannie Mae and Freddie Mac, which require mortgages to have minimum property insurance coverage, would not back up those mortgages.

“The purpose of this letter is to urge you to reconsider your reliance on Demotech as the primary ratings agency for rating the strength of Florida’s domestic insurance market and to give Florida lenders time to identify a suitable alternative ratings body to evaluate the financial strength of Florida insurers,” Patronis wrote.

In a separate letter, OIR Commissioner David Altmaier wrote to Demotech president Joseph Petrelli, distressed that a downgrade of their financial stability rating from an “A” rating to an “S” (substantial) or “M” (moderate) is forthcoming for 17 companies.

“OIR is compelled to take the extraordinary step of scrutinizing these unprecedented actions to protect the Floridians we serve, especially two months into hurricane season,” Altmaier wrote. “This is an example of inconsistent, monopolistic power of a select rating agency and is trying to exert coercive influence over Floridians and policymakers in an effort to thwart public policy according to its own opinions.”

Demotech’s new ratings haven’t been made public, so the identity of the companies isn’t yet known, but Patronis’ and Altmaier’s letters say the agency has been in contact with the companies staring at imminent downgrades. OIR’s letter indicates the companies were informed of the downgrades on Tuesday, and they are slated to take effect on July 26.

Reinsurance is one of the main issues, which has become much more expensive this year as reinsurers take a more skeptical eye on the Florida market. Some carriers have been priced out of the market altogether, jeopardizing their ability to keep the minimum amount of claims-paying ability on their books.

But Patronis says in his letter that all downgraded companies have been able to obtain reinsurance. And Patronis and Altmaier contend Demotech hasn’t considered the changes to the law passed by the Legislature in a Special Session in May, which set up a $2 billion reinsurance fund and sought to limit the amount and expense of litigation for insurers.

If Demotech is allowed to go through with the downgrades, Patronis wrote, the consequences for Florida could be dire.

“Not only could Florida families end up being required to accept expensive and inadequate forced-placed coverage from their lender, but a ‘rug-pull’ of this magnitude would expose over 115,000 Florida insurance agents to litigation risks,” Patronis wrote.

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