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Insurers approved for another big Citizens Property Insurance takeout

Published Dec. 6, 2014

The great shrinkage of Citizens Property Insurance rolls on.

State insurance regulators on Friday approved five Florida-based insurers to take up to 132,441 more homeowners policies out of state-run Citizens in February, bolstering the company's goal to shed as many policies as possible.

Carriers approved in the latest round are:

• American Colonial Insurance Co. — approved to remove up to 5,441 personal residential policies.

• Anchor Property & Casualty Insurance Co. — up to 30,000 residential policies.

• Heritage Property & Casualty Insurance Co. — up to 20,000 residential policies.

• Homeowners Choice Property & Casualty Insurance Co. — up to 50,000 residential policies.

• Mount Beacon Insurance Co. — up to 27,000 residential policies.

Heritage also was approved to take out up to 500 commercial residential policies.

Citizens says it is trying to push policies into the private market to reduce risk for the state. Under state law, every insured Floridian can be assessed if Citizens is swamped by claims after a major storm that it is unable to cover.

The latest move by Florida Insurance Commissioner Kevin McCarty brings the total number of policies approved for takeouts in 2015 to 315,508.

Not every policy approved for a takeout leaves Citizens, however. Companies may choose to seek less than their maximum approved number while policyholders may "opt out" of leaving Citizens. In fact, roughly 40 percent of targeted Citizens customers have been rejecting the takeout offers since 2008, expressing concern that the companies seeking Citizens' policies are not financially fit and/or have never had to handle claims after a major hurricane.

A recent Tampa Bay Times story also detailed concerns with how Citizens has run the takeout program itself, including customer accusations that they were deceived about their ability to opt out or never sent opt-out forms. Customers also bristled at language in the letters warning of possibly huge surcharges if they stick with Citizens.

In response, Citizens CEO Barry Gilway pledged to take unspecified steps to improve communication.

Regulators gave private insurers the right to take out more than 1.1 million policies from Citizens in 2014, but only 185,405 were actually taken out as of Nov. 20.

Citizens has shrunk from 1.5 million policies in 2012 to about 727,000 as of the end of November.

Contact Jeff Harrington at jharrington@tampabay.com or (813) 226-3434. Follow @JeffMHarrington.

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