TALLAHASSEE — The number of customers of the state’s Citizens Property Insurance Corp. dropped this month after private carriers took over nearly 100,000 policies.
Citizens had 1.325 million policies as of Friday, down from 1.412 million policies two weeks earlier, according to data from the state’s insurer of last report.
The drop came as five private insurers assumed 99,773 Citizens policies in mid-October as part of a state effort known as “depopulation” to shift homeowners into the private market. It also came after three years of explosive growth at Citizens, as private insurers shed customers and raised rates because of financial troubles.
State Insurance Commissioner Michael Yaworsky last week told lawmakers that private insurers taking Citizens policies is not “the end-all, be-all” of having a healthy insurance market. But he also indicated it is encouraging.
“I think the biggest takeaway from this is that we’re seeing that private interest come into the state,” Yaworsky told the House Insurance & Banking Subcommittee. “It’s generally a good sign of where the market is going.”
Under the state’s depopulation program, private insurers can seek approval from regulators to offer coverage to Citizens customers.
Those carriers are Slide Insurance Co., which assumed 46,694 policies; Safepoint Insurance Co., 24,110 policies; Florida Peninsula Insurance Co., 18,594 policies; Southern Oak Insurance Co., 5,346 policies; and Monarch National Insurance Co., 5,029 policies, according to Citizens data.
Many state leaders have long sought to move customers out of Citizens into the private market, at least in part because of the risk that policyholders across the state could be forced to help pay claims after a major hurricane or multiple hurricanes.
But officials say Citizens often charges lower premiums than private insurers, reducing the incentive for customers to leave Citizens.
Trying to help spur depopulation, lawmakers in December approved a change that required Citizens customers to accept offers of coverage from private insurers if the offers are within 20% of the cost of Citizens premiums.
But data released Tuesday by Citizens indicated many customers targeted by the five companies for October takeouts remained eligible to stay with Citizens, as they received offers that would have exceeded 20% rate hikes.
As part of orders issued in late September and early October to allow seven insurers to assume as many as 168,000 policies in December, Yaworsky said they could not seek to raise rates more than 40% for policyholders coming from Citizens.
“We saw where some companies were making takeout offers to consumers that exceeded 300 to 500 percent of the cost of what they were paying with Citizens,” Yaworsky told the House panel last week, adding that because of what is known as an “opt-out” system, “if the consumer happened to not be noticing that that was going on, they would wind up paying up to 300 percent more for their insurance.”
