Florida Amends Citizens’ Take-out Rules

Florida Insurance Commissioner Kevin McCarty has approved rules for insurers taking policies out of Citizens Property Insurance Corp. They include requiring Citizens to notify policyholders whose agents have refused to allow their policies to be removed from Citizens.

The rules also provide for the first take-outs of commercial-residential or condominium association policies.

Under current Florida law, companies approved to remove policyholders from Citizens, known as take-out companies, must first get permission from the policyholder’s agent. If the agent is unable or unwilling to transfer the Citizens’ policy to the take-out company, the policy stays in Citizens.

“Without requiring policyholders to be informed that they could be moved into the private market at or below their current premium, the take-out process fails to provide real consumer choice and is contrary to state objectives to reduce the exposure of Citizens,” McCarty said. “Thousands of Citizens’ policyholders who may have been kept in the dark under the old process now will have the opportunity to decide for themselves if they wish to be removed from Citizens and placed with a private insurer.”

Beginning May 1, the order requires Citizens to send all qualified policies to take-out companies for selection without instructing them not to choose qualified policies from a list of agents and agencies that have refused in the past. If the agent refuses the take-out, Citizens must notify the policyholder of their agent’s refusal and provide the take-out company’s contact information should the policyholder wish to be removed from Citizens.

The Office of Insurance Regulation approved the plans of 10 insurance companies to remove policies from Citizens over the next year. Some of the companies already have begun removing policies, and others will begin in April. Taken as a whole, the approved plans will remove over 400,000 policies from the state-run insurance company and place them in the private market.

The 10 companies that have been approved to remove Citizens policies are: American Integrity Insurance Co. of Florida; First Home Insurance Co.; Landmark One Insurance Co.; Florida Peninsula Insurance Co.; HomeWise Preferred Insurance Co.; Southern Oak Insurance Co.; Homeowners Choice Property & Casualty Insurance Co.; Northern Capital Insurance Co.; Sunshine State Insurance Co. and Argus Fire & Casualty Insurance Co.