Florida regulators approve further depopulation efforts
Florida insurance regulators have approved yet another initiative from the state’s Citizens Property Insurance organization to shed policies. The state-run insurer has been working to depopulate itself of homeowners insurance policies for the past few years in order to resolve ongoing financial issues. The endeavor has proven quite successful, as the insurer recently announced that it now has some $7 billion in reserve capital. The initiative has caused some concern among consumers, however, whose policies are being taken up by private companies.
151,000 policies being removed from Citizens
State regulators have approved the removal of 151,000 policies from Citizens Property Insurance. The state-run organization will shed these policies beginning in February 2014. The removal of these policies is expected to make Citizens Property Insurance more resilient to future natural disasters as it will be exposed to less financial liability. The policies that will be removed from Citizens Property Insurance will be taken up by numerous private companies that will keep the provisions of these policies intact.
Regulators working with insurers to ensure that policies remain intact
Before private insurers can take up policies shed by Citizens, they must receive approval from state regulators. Officials with the Florida Office of Insurance Regulation are working to ensure that private home insurance companies will continue to honor the provisions of policies that had once belonged to Citizens. This means that private insurers must provide rates that are identical to those policyholders had to pay when their coverage came through Citizens. Other provisions, such as what type of coverage is provided by a policy, must also be honored by private insurers.
Citizens works to expedite depopulation efforts
Citizens is currently on track to shed approximately 800,000 policies in the hopes that this initiative will provide the organization with some degree of financial stability. Florida has managed to avoid any catastrophic natural disaster for the past few years, which has helped Citizens recover from the disastrous events of the past. It is impossible to say, of course, whether or not a natural disaster will visit Florida in the coming months and cause any serious damage. As such, Citizens is working to expedite its depopulation efforts in order to mitigate any future liability.