Make us your home page
Instagram

Citizens to shift coastal policies to private insurer

TALLAHASSEE — Trying to shed some major financial risks, state-backed Citizens Property Insurance Corp. moved forward Monday with a plan to shift thousands of coastal hurricane policies to a private insurer.

The plan, which will play out during the next few months, will lead to Weston Insurance Co. taking over wind-only policies from Citizens — including a first-of-its-kind removal of policies for condominium buildings in coastal areas.

"We have the opportunity to get this hurricane risk off the books," said Sharon Binnun, Citizens' chief financial officer, during a conference call of the Citizens board.

Citizens, which is Florida's largest property insurer with about 1.3 million policies, has long tried to move policies into the private sector through a process known as "depopulation." Citizens said it expects Weston to assume 23,000 wind-only homeowners' policies, 3,000 condominium-complex policies and 5,000 commercial nonresidential policies, all of which are in coastal areas.

Under the plan, Weston would agree to retain the policies for at least three years and also continue limits placed on Citizens' premium increases. Those limits, set in state law, allow Citizens' rates to increase 10 percent a year.

While Citizens has had success during the past year in getting insurers to take other types of policies, wind-only coverage has been trickier because of the financial risks involved.

Locke Burt, president and chairman of Security First Insurance Co., told a Senate committee last week that Citizens should stop writing wind-only policies as a way to increase depopulation opportunities. Burt, a former senator, said private insurers would be more likely to take over policies that are "multi-peril," including not only wind but more profitable types of coverage such as burglary and fire.

The Citizens board Monday approved a key first step in the Weston plan. That step, which Citizens officials described as a "bridge," involves Citizens paying premiums to Weston for reinsurance coverage through May 31. During that period, Weston will provide coverage for claims stemming from the wind-only policies that it is taking out of Citizens.

The arrangement will allow Weston to build up premiums in advance of hurricane season, while Citizens will reduce its exposure to wind damage through May 31 because Weston will provide reinsurance. After the transition period, Weston will provide coverage for the policies.

Citizens to shift coastal policies to private insurer 02/11/13 [Last modified: Monday, February 11, 2013 9:24pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Pinellas construction licensing board needs to be fixed. But how?

    Local Government

    LARGO –– Everyone agrees that the Pinellas County Construction Licensing Board needs to be reformed. But no one agrees on how to do it.

    Rodney Fischer, former executive director of the Pinellas County Construction Licensing Board Rodney, at a February meeting. His management of the agency was criticized by an inspector general's report. [SCOTT KEELER   |   Times]

  2. New owners take over downtown St. Petersburg's Hofbräuhaus

    Retail

    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.
[SCOTT KEELER  |  TIMES]

  3. Boho Hunter will target fashions in Hyde Park

    Business

    Boho Hunter, a boutique based in Miami's Wynwood District, will expand into Tampa with its very first franchise.

    Palma Canaria bags will be among the featured items at Boho Hunter when it opens in October. Photo courtesy of Boho Hunter.
  4. Gallery now bringing useful art to Hyde Park customers

    Business

    HYDE PARK — In 1998, Mike and Sue Shapiro opened a gallery in St. Petersburg along Central Ave., with a majority of the space dedicated to Sue's clay studio.

     As Sue Shapiro continued to work on her pottery in St. Petersburg, her retail space grew and her studio shrunk. Now Shapiro's is bringing wares like these to Hyde Park Village. Photo courtesy of Shapiro's.
  5. Appointments at Raymond James Bank and Saint Leo University highlight this week's Tampa Bay business Movers & Shakers

    Business

    Banking

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. Jackson will oversee all of Raymond James Bank's operational business elements, risk management and strategic planning functions. Kackson joins Raymond James Bank after senior …

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. [Company handout]