In a continued effort to reduce its reliance on the state-backed insurer of last resort, Florida regulators have approved the transfer of over 300,000 home insurance policies from Citizens Property Insurance Corp. to private insurers. This move comes as the state braces for the potential impact of Hurricane Milton, which could pose a significant financial risk to Citizens.
Insurance Commissioner Michael Yaworsky recently approved a series of orders allowing six private insurance companies to assume up to 310,022 policies from Citizens in December. This follows earlier approvals for the transfer of hundreds of thousands of policies in October and November.
Read: Hurricane Milton Evacuation Underway In Florida: Heavy Traffic, Bridge Closures Expected
Reducing Risk for the State
State leaders have long sought to shift policies from Citizens to the private market to mitigate the financial burden on the state in the event of a major hurricane. If Citizens were to exhaust its funds to cover claims, policyholders across Florida, including those with private insurance, could be subjected to assessments to make up the shortfall.
Citizens, which currently holds 1.265 million policies, became Florida’s largest insurer due to the financial struggles faced by private carriers in recent years. The “depopulation” program, under which private insurers can take over Citizens policies with state approval, is a key strategy to reduce the size and risk of Citizens.
Insurers Approved for Policy Transfers
The six insurers approved for the December depopulation round include:
- American Integrity Insurance Company of Florida (up to 102,923 policies)
- Slide Insurance Co. (up to 75,000 policies)
- Southern Oak Insurance Co. (up to 50,000 policies)
- Manatee Insurance Exchange (up to 39,000 policies)
- Trident Reciprocal Exchange (up to 23,099 policies)
- Florida Peninsula Insurance Co. (up to 20,000 policies)
While the maximum number of policies that could be transferred is 310,022, the actual number is likely to be lower based on historical trends.
This move to shift policies to the private market is a crucial step in strengthening Florida’s insurance landscape and reducing the potential financial impact of future hurricanes.
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