Christine Jordan Sexton
Florida’s insurance regulators are touting the entry of a new company into the state’s turbulent insurance market as a reassuring sign.
The Office of Insurance Regulation has approved Condo Owners Reciprocal Exchange to start selling commercial residential policies in the state. Insurance trade publications say that the company was started by HCI Group, a holding company that already operates a domestic insurer in Florida.
“OIR is pleased to see more companies, jobs and capital coming into Florida’s insurance market this year,” said Insurance Commissioner Michael Yaworsky. “This announcement is further indication that the reforms are having the intended impacts on our market and further expanding the choices for consumers.”
Reciprocal insurers operate differently than other types of insurance companies. Reciprocal insurers, or exchanges, are insurance organizations where individuals and businesses “exchange” insurance contracts and spread the risks associated with those contracts among themselves. Policyholders are “subscribers.”
The decision to approve Condo Owners’ entry into the market comes shortly after HCI Group Inc. announced that its largest subsidiary, Homeowners Choice Property & Casualty Insurance Company, assumed approximately 53,750 policies from Citizens Property Insurance. Most takeout policies — 70% — will have lower rates than consumers would have paid to remain in the state-created Citizens.
Yaworksy said there has been an uptick in insurer participation in efforts to transfer policies out of Citizens into private carriers. So far, OIR has approved insurers to assume more than 650,000 policies from Citizens this year, a more than 800% increase from the previous year. However, there is no guarantee that all those policies will leave Citizens.
The state of Florida’s battered property insurance market — which has seen carriers go under and scale back coverage — has continued to be a top priority for many legislative leaders and Rep. Daniel Perez, who is slated to become the next Speaker.
