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Florida's Temporary Market Stabilization Arrangement


The Florida Office of Insurance Regulation (OIR) announced a plan to establish a temporary market stabilization arrangement through Citizens Property Insurance Corporation (Citizens) in the event of disruptive financial rating downgrade. This unprecedented solution would allow insurers to meet an exception offered by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) and ensures Floridians can maintain coverage during hurricane season.

The temporary market stabilization arrangement is a substitute for an acceptable financial stability rating for policies with mortgages backed by Fannie Mae and Freddie Mac. The arrangement provides that if an insurer is covered by a reinsurer who assumes, by endorsement, 100 percent of the insurer’s liability or any covered loss payable, but unpaid by the insurer, for reason of insolvency, it meets the exemption requirements for Fannie Mae and Freddie Mac.

On December 7, 2022, Fannie Mae and Freddie Mac noticed all of its Single-Family Sellers/Services with guidance on the acceptance of property insurance policies in Florida, in conjunction with OIR's establishment of the Temporary Market Stabilization Arrangement. More information is available here.

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