Homeowners Choice Inc., a 3-year-old property insurer based in Clearwater, has received regulatory approval to assume 60,000 homeowners policies from state-run Citizens Property Insurance Co.
The decision represents one of the biggest steps by the state this year to "depopulate" policies from Citizens, which has more than a million property insurance policies.
As State Farm and other major insurers shed thousands of Florida policies, Citizens is at risk of expanding further. That places greater risk on all insured Floridians, who can be assessed to pay for any claims Citizens cannot cover after a major hurricane.
Under authorization by the Florida Office of Insurance Regulation, Homeowners Choice can take a maximum of 30,000 policies out of Citizens in December. OIR spokesman Tom Zutell said the company would be re-evaluated next year before it could take out the balance of policies approved.
"This additional takeout authorization by the Florida OIR reflects our solid financials and capitalization as well as our successful track record assuming policies from Citizens," F.X. McCahill, chief executive officer of Homeowners Choice, said in a statement.
Currently, Homeowners Choice has about 53,000 policyholders throughout Florida paying about $100 million in annualized premiums. Homeowners Choice, which is publicly traded, also intends to grow by acquisition. It is trying to buy fellow homeowners insurer 21st Century Holding Co. of Fort Lauderdale for about $42 million in cash and stock. If successful, that deal would add another 35,000 policies to the company's portfolio.