Four Florida-based property insurers have been given the green light to remove up to 150,000 policies from the state-backed Citizens Property Insurance Corp., which would contribute to the greatest shift of policies to the private market since 2008.
Citizens has been looking to depopulate ever since last year when Gov. Rick Scott charged the insurer with finding ways to shed up to 600,000 policies. In response, the insurer has pulled back coverage, increased policyholders costs and reached out to private insurers to assume policies in hopes of reducing its policyholder rolls.
Now, Citizens is seeing some signs of success. The insurers said that four Florida domestic companies have stepped forward with plans to assume up to 150,000 policies.
Florida Peninsula Insurance Co. has received approval to remove 35,000 policies; Homeowners Choice P&C Insurance Co., 75,000 policies; Southern Fidelity P&C Inc., 30,000 policies, and Southern Oak Insurance Co., 10,000.
The 150,000 policies, along with the 84,000 policies already removed by private insurers this year, should make 2012 the most successful year for depopulation since 2008. In 2011, only 53,000 Citizens policies made their way back to the private market, which mirrored closely the 60,000 removed in 2010.
Florida Insurance Commissioner Kevin McCarty said the four take-out plans were a harbinger of good things to come.
“The leadership and commitment by Florida’s domestic companies to expand their business in our states sends a clear signal that we have a reinvigorated homeowners insurance marketplace,” said McCarty in a statement.
While the four companies have received approval to remove 150,000 Citizens policies, it remains to be seen just how many of those policies will in fact be taken off of Citizens policyholder rolls.
Under Florida law, policyholders and their agents have up to 30 days to decline the offer of coverage. Regulators said that Citizens policyholders earmarked for assumption by the four private insurers will receive an offer of coverage on Oct. 1. Unless they object to the take-out, the private companies would assume the policy as of Nov. 1.
McCarty announced the take-outs as Citizens is considering a new plan to use up to $350 million of its surplus to provide other insurers with an incentive to remove large blocks of policies. The Citizens board is considering the plan at its board of governor’s meeting being held today in Tallahassee.