Florida insurance regulators last week pitched a contingency plan to help property insurers weather any turmoil in the market caused by a ratings agency’s plan to downgrade the financial status of 17 insurers.

Last month, Ohio-based Demotech indicated that it would downgrade the property insurers’ ratings in the troubled Florida market, prompting Florida officials to issue searing responses against Demotech. The ratings agency on July 25 delayed its decision on finalizing the downgrades, but Demotech just lowered United Property & Casualty Group’s rating from an “A” to an “M,” while both Weston Insurance and FedNat Insurance Co. lost their “A” ratings.

The prospect of 17 downgrades sent shockwaves through the Florida insurance market because Fannie Mae and Freddie Mac, the home mortgage companies created by Congress, require property insurance policies on their mortgages to meet certain financial rating requirements.

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