In an effort to reduce the state-backed insurer’s risk and stabilize the Florida insurance market, state regulators have approved proposals for private insurers to take over more than 400,000 policies from Citizens Property Insurance Corp. this fall.
Insurance Commissioner Michael Yaworsky signed orders allowing ten carriers to assume these policies, which will begin transferring in late October, after the peak of hurricane season. While the approved amount is over 400,000, the actual number transferred is expected to be lower based on past experience.
Read: Florida Gov. DeSantis Updates States’ Actions As Tropical Depression Four Strengthens
This move comes as Citizens, the state’s insurer of last resort, has seen significant growth in recent years due to private insurers dropping customers and raising rates. The depopulation program aims to shift policies back to the private market, reducing Citizens’ financial burden and potential for statewide assessments in the event of major storm damage.
Citizens officials remain optimistic about the program’s effectiveness and predict the total number of policies will fall below 1 million by the end of the year. The takeouts are scheduled for October 22 and 29, depending on the insurer and policy type.
The approved proposals include various policy types, with the majority being homeowners’ multi-peril policies. Some carriers will also assume wind-only, commercial residential, and commercial non-residential policies.
Read: Florida Gov. DeSantis Updates States’ Actions As Tropical Depression Four Strengthens
To protect policyholders, the orders include a provision preventing private insurers from offering rates more than 40% higher than Citizens’ renewal premiums. This aims to mitigate potential financial burdens on policyholders during the transition.
This depopulation effort is a crucial step in stabilizing Florida’s insurance market and reducing the financial risks associated with a major hurricane event.
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