Private Insurers to Take Over 300,000 Citizens Policies in Florida
TALLAHASSEE – Florida regulators have given the green light to private insurers, allowing them to assume over 300,000 policies from Citizens Property Insurance Corp. in December. This move is part of the state’s ongoing effort to reduce both the size and the financial risk of the insurer of last resort.
Insurance Commissioner Michael Yaworsky signed a series of orders on Friday, which will permit private insurers to take on up to 310,022 policies from Citizens. These approvals follow earlier authorizations for private insurers to assume hundreds of thousands of policies later this month and in November.
These orders were issued just days before Citizens could potentially face significant costs from Hurricane Milton, which was forecast to make landfall on the state’s Gulf Coast. As of September 20th, Citizens held 227,708 policies in Hillsborough, Manatee, Pinellas, and Sarasota counties, areas potentially impacted by the storm.
State leaders have long aimed to shift policies from Citizens to the private market, driven in part by the financial risks associated with major hurricanes. If Citizens lacks sufficient funds to cover claims, policyholders throughout the state, including those not insured by Citizens, could be subject to “assessments” to address any shortfalls.
Citizens has grown to become Florida’s largest insurer in recent years, as private carriers encountered financial difficulties. As of Friday, Citizens held 1.265 million policies. A core component of the state’s strategy to downsize Citizens is the “depopulation” program. This program allows private insurers to seek approval from the state Office of Insurance Regulation to assume Citizens policies.
The orders issued on Friday were part of this depopulation program. Six insurers submitted proposals in August, and after approval, they will be able to assume Citizens policies in mid-December. While up to 310,022 policies could be transferred, the actual number is likely to be somewhat lower, based on previous depopulation efforts.
On Friday, American Integrity Insurance Company of Florida was approved to assume up to 102,923 policies. Slide Insurance Co. was approved for up to 75,000, and Southern Oak Insurance Co. was approved for up to 50,000 policies. In addition, Manatee Insurance Exchange was approved for up to 39,000 policies, Trident Reciprocal Exchange for up to 23,099, and Florida Peninsula Insurance Co. for up to 20,000 policies.
According to a summary from the Office of Insurance Regulation, insurers had previously been approved to assume up to 414,258 policies this month and 235,035 policies in November.
