Another 182,000 insurance policies have been approved by the Florida Office of Insurance Regulation (“OIR”) to be transferred to private insurers, (commonly referred to as “takeout” companies), in 2015 as part of the state’s ongoing effort to reduce the number of policies handled by Citizens Property Insurance Corporation. While it is unlikely that all will be assumed from Citizens, (according to the OIR, about 127,550 of the 1.1 million policies approved last year were transferred), the effect of the mass assumption on Florida policyholders should not be overlooked.
I recently wrote about the effect such takeouts may have on policyholders and those assisting policyholder’s with their insurance claims with respect to the more than two-thousand commercial residential policies being taken out by Heritage Insurance. One of the most important things to keep in mind is that losses which occur after a certain date should be reported to the takeout company – not Citizens. It is also important to read the Assumption Notice that is sent by the takeout company carefully, which should explain the procedure one must follow to opt-out of the assumption and keep your policy with Citizens.
The mass assumption of policies from Citizens has also raised some serious concern from both policyholders and experts in the industry who believe some of the takeout companies do not have the experience or capital to handle all these claims. For example, included the list of recently approved “takeout” companies is Anchor Property & Casualty Insurance Company. The Bradenton-based insurance company only recently became licensed by the Florida Office of Insurance Regulation on October 28, 2014. Though Anchor reportedly has $35 million in capital, the question is, will that be enough to handle the 50,000 policies it is taking over and pay what it needs to make policyholders whole if a loss occurs?
The other “takeout” companies approved by the Florida Office of Insurance Regulation for 2015 include Avatar Property & Casualty Insurance (up to 10,000 policies), Cypress Property & Casualty Insurance (up to 23,000 policies), Heritage Property & Casualty Insurance (up to 20,500 policies), Mount Beacon Insurance (up to 38,485 policies), Prepared Insurance (up to 20,000 policies), Security First Insurance (up to 8,555 policies), Southern Oak Insurance (up to 10,000 policies) and United Property & Casualty Insurance (up to 2,027 policies).1
1 Insurance Journal, “Florida Approves Up to $183K Takeouts from Citizens for 2015,” October 30, 2014. Available at: <http://www.insurancejournal.com/news/southeast/2014/10/30/345474.htm>.