Florida Approves More Takeouts at Citizens; OKs Commercial Hikes

Florida regulators announced that two property insurance companies have been approved to take out up to 100,000 policies from the state-backed insurer in December, adding to the 210,000 policies already slated for removal in November.

State regulators also approved the insurer’s rates for a variety of commercial policies.

American Integrity Insurance Co. of Florida has been approved to take out an additional 40,000 policies in December after previously being approved to remove 50,000 next month. Heritage Property & Casualty Insurance Co. has been given the green light to take out 60,000. The St. Petersburg-based company is a new start-up, having been licensed last August.

They join five other takeout insurers: First Community Insurance Co. (6,643 policies), Florida Peninsula Insurance Co. (45,000 policies), Homeowners Choice Property & Casualty Insurance Co. (75,000 policies), Southern Fidelity Property & Casualty Inc. (30,000 policies), and Southern Oak Insurance Co. (10,000).

In total, 84,339 policies have been removed from Citizens as of September 2012. An additional 6,643 policies have been approved for renewal as of last month, with another 210,000 slated for November and 100,000 for December. All together, they represent about 400,000 possible takeouts, though the actual number is expected to be less since policyholders and/or their agents have up to 30 days to decide whether to accept or reject the takeout.

The takeouts come as Citizens continues to work on its plan to loan private insurers up to $350 million in surplus in exchange for removing large blocks of policies. However, in response to some lawmakers questioning the plan, Citizens has asked Goldman Sachs for an independent review of the program by January.

Also, the Office of Insurance Regulation approved Citizens’ commercial rates. In the coastal lines account that only provides wind coverage, rates for residential condominium associations will increase 10.6 percent, while all other residential policies will jump 10.8 percent. Nonresidential property rates will rise 9.5 percent.

In the commercial lines account, rates for residential condominium associations will increase 9.9 percent; other residential policies will increase 3.1 percent and nonresidential policies will go up 10 percent on average.