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Citizens Sheds 100,000 Home Policies
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Published: May 21, 2008
TAMPA - Six private insurance companies have been authorized to take 100,000 homeowners policies from state-run Citizens Property Insurance Corp., the Florida Office of Insurance Regulation announced Wednesday.
The companies are American Integrity Insurance Co. of Florida, Argus Fire & Casualty Insurance Co., Avatar Property and Casualty Insurance Co., Homeowners Choice Property & Casualty Insurance Co., Magnolia Insurance Co. and Southern Oak Insurance Co.
Policyholders will be offered coverage that is equal or better than their present coverage at the same or lower rate. The take-outs are voluntary, which means policyholders wanting to remain with Citizens can refuse the offer.
State Insurance Commissioner Kevin McCarty said each company has two to three times more than the $5 million in start-up capital required.
"Every company removing these policyholders into the private market has met Florida's rigorous licensing standards," Insurance Commissioner Kevin McCarty said in a statement. "We monitor the removal process very carefully to ensure policyholder protection."
Up to 500,000 policies could be removed from Citizens this year, according to the state office. Last year, private insurers removed 248,000 policies from Citizens.
Citizens, created as an insurer of last resort, became the state's largest property insurer after private insurers stopped writing new policies and dropped thousands of customers in response to the hurricanes of 2004 and 2005.
The take-outs are designed to reduce Citizens' exposure to hurricane risk. If a major hurricane hit the state, Citizens would be hit with billions in losses, most of which would be paid by Floridians in the form of assessments on all policies.
Reporter Russell Ray can be reached at (813) 259-7870 or rray@tampatrib.com.
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