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:

   1. (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.;

   2. (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

   3. (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. (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. History–New 6-1-06.