Citizens gets OK to shed another 71,500 policies in March

Citizens Property Insurance Corp. — Florida’s state-backed “insurer of last resort” — received approval Monday to shed another 71,500 home insurance policies from its rolls amid an ongoing effort to reduce the state’s liabilities.

The Florida Office of Insurance Regulation announced two private carriers have been approved to take over the policies, which cover properties private insurers previously deemed untenable for coverage.

Heritage Property & Casualty Insurance Co. is set to assume 55,000 personal residential policies (35,000 personal line policies and 20,000 coastal), plus up to 1,500 commercial residential policies (1,300 commercial lines policies and 200 coastal). Southern Oak Insurance Co. has been approved to take on 15,000 personal residential policies (10,000 personal lines and 5,000 coastal).

The next “take out” periods are March 15 for commercial policies and March 22 for personal property policies. At that time, policyholders will be offered private insurance under the presumption they will switch. If they wish to keep their current state-backed policies, they must send a letter to the state to opt out of the takeover.

The state has approved “depopulation” of Citizens’ insurance rolls to the tune of nearly 2 million policies since 2014. Gov. Rick Scott and his insurance regulation regime has been particularly keen on shedding policies since he assumed office in 2011.

Some state lawmakers have objected to the practice of forcing policyholder to opt-out in order to keep their Citizens policy, which has led to confusion and annoyance for many homeowners.

“They’ve sent out one deceptively worded letter after another, warning of crippling assessments for those who stay, and encouraging homeowners to accept the ‘beneficial’ options offered by private insurers,” said Democratic Rep. Dwight Dudley, who introduced legislation to end the practice. “The truth is that Citizens is sitting on a $7.6 billion surplus, which makes the prospect of assessments unlikely.”

Representatives for Citizens, for their part, reply they under no circumstances intend to deceive policyholders into switching. They insist they are transparent as they facilitate the take outs, sending letters from their office to accompany those from the private firms looking to assume the policies. The insurer also points to the public benefit of transferring policies to the private market, which reduces taxpayer liability.