Insurers Get OK for Citizens' Policies

TALLAHASSEE, Fla. — A wave of policies could leave the state’s Citizens Property Insurance Corp. after this year’s hurricane season.

The Florida Office of Insurance Regulation on Monday issued orders that would allow 10 insurers to take up to 254,811 policies from Citizens in mid-December. That came after earlier approvals for companies to assume batches of policies in October, November and December.

The approvals are part of what is known as a “depopulation” program aimed at whittling the size of Citizens, which was created as an insurer of last resort but grew to become Florida’s largest insurer in recent years amid problems in the private market.

Citizens had 771,167 policies as of Friday, according to data on its website. While it remains the state’s largest insurer, the depopulation program and improvements in the private market have helped shrink Citizens from as many as 1.4 million policies in 2023.

It remains unclear how many policies will actually leave Citizens under the orders signed Monday by Insurance Commissioner Michael Yaworsky. The approved totals are maximum numbers, and policies assumed by insurers typically wind up being less than those amounts.

But Manatee Insurance Exchange was approved to take up to 50,000 policies, while American Integrity Insurance Co. was approved to take up to 30,265, according to the orders.

Five insurers – Homeowners Choice Property & Casualty Insurance Co., Monarch National Insurance Co., Stand Insurance Exchange, Tailrow Insurance Exchange and TypTap Insurance Co. – were each approved to take up to 25,000.

Meanwhile, Apex Star Reciprocal Exchange was approved to take up to 24,546, Florida Peninsula Insurance Co. was approved to take up to 15,000 and People’s Trust Insurance Co. was approved to take up to 10,000, according to the orders.

State leaders and Citizens officials have long sought to reduce the size of Citizens, at least in part because of financial risks if Florida gets hit with a major hurricane or multiple hurricanes. If Citizens couldn’t pay all of its claims, it could collect additional money from policyholders throughout the state – including possibly non-Citizens policyholders – to cover costs through what are known as assessments.

But the depopulation program can have a downside for policyholders, who might see their rates increase. That is because of a law making customers ineligible to remain with Citizens if they receive offers of coverage from private insurers that are within 20% of the cost of Citizens premiums. For example, if a homeowner received an offer of coverage from a private insurer that is 19% higher than the Citizens premium, the homeowner would not be eligible for Citizens coverage.

The program, however, can provide an opportunity for private insurers looking to build or add to their businesses. For example, Mangrove Property Insurance Co. said Monday it had about a 90% renewal rate on an initial round of renewals of policies assumed from Citizens.

While the number of Citizens policies decreased over the past two years, the depopulation effort has slowed this summer as insurers wait out the hurricane season, which started June 1 and will end Nov. 30.

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