Four insurers approved to take out up to 184,000 Citizens policies

Recently created Slide Insurance and four other companies have been approved to take up to 184,000 policies out of Citizens Property Insurance Corp., Florida’s “insurer of last resort.”

Slide’s CEO Bruce Lucas on Tuesday characterized his company’s approval to take over up to 100,000 Citizens policies as “one of the largest takeout approvals ever in Florida, if not the largest,” according to the insurance-news website Artemis.bm.

The Florida Office of Insurance Regulation confirmed the report of the takeouts on Tuesday, pointing to consent orders posted on its website on Monday. Citizens policyholders selected by one of the companies for takeout will be notified by mail.

One of the orders approves Slide’s assumption of 98,000 personal residential policies from Citizens’ personal lines account and 2,000 multi-peril policies from its coastal account, effective Oct. 17 “or a later date approved by the Office and Citizens.”

Unlike previous Citizens takeouts, customers won’t be able to turn down takeouts approved this year for any reason they choose.

A new state law enacted in December requires policyholders to accept takeout offers if the premium charged by the takeout company is 20% or less over what they are paying for their Citizens policy.

Lawmakers approved the requirement in an effort to prevent Citizens from expanding its dominance in Florida’s insurance market.

Steep increases in premiums by private-market insurers as well as failure of numerous companies over the past two years has propelled Citizens’ size from 419,000 policies in 2019 to more than 1.3 million currently.

Citizens’ rates are attractive because state law has prevented the company from imposing annual rate increases of more than an average of 10% over the past decade and 11% for the upcoming year. Private-market companies, meanwhile, have been increasing rates at much larger percentages, hurting their ability to hold onto customers.

Lucas told Artemis.bm that success of his company’s takeout depends on the Office of Insurance Regulation’s approval of Citizens’ requested 11% rate increase this year to reduce the gap between their Citizens’ premium and their takeout offer below 20% by Oct. 17.

“Without the rate increase, we’ve done the analysis, there’s not a lot that we can take,” the site quoted Lucas as saying.

Slide wasn’t the only private market insurer approved on Monday to take out Citizens policies.

Others are:

  • Safepoint Insurance Co. — up to 30,000 policies (19,000 personal residential policies from Citizens’ Personal Lines Account, 8,000 multi-peril policies from Citizens’ Coastal Account, and 3,000 wind-only policies from Citizens’ Coastal Account).
  • Southern Oak Insurance Co. — up to 25,000 policies, including 17,500 personal residential policies from Citizens’ Personal Lines Account, 2,500 multi-peril policies from Citizens’ Coastal Account and 5,000 wind-only policies from Citizens’ Coastal Account.
  • Monarch National Insurance Co. — Up to 10,000 policies, including 9,510 personal residential policies from Citizens’ Personal Lines Account and 490 multi-peril policies from Citizens’ Coastal Account.
  • Florida Peninsula Insurance Co. — Up to 19,000 policies, including 17,750 personal residential policies from Citizens’ Personal Lines Account and 1,250 multi-peril policies from Citizens’ Coastal Account

So far in 2023, eight companies have been approved to take out 280,000 Citizens’ policies, OIR spokeswoman Samantha Bequer said in an email on Tuesday.

“OIR is seeing greater participation and interest in the Citizens Depopulation program this year,” Bequer said, adding the number of policies requested by those eight companies in the first half of 2023 surpasses the total number requested last year.

Citizens spokesman Michael Peltier said 21,812 policies have been transferred out of Citizens so far this year. Of them, 17,239 were taken over by Monarch National, he said.

Lucas, who formed Heritage Property & Casualty in 2012 and built it with Citizens takeouts before leaving the company in 2020 and launching Slide the following year, told Artemis.bm that he has managed more Citizens takeouts than probably “any other CEO in Florida.”

He told the site that Slide has secured “more than enough reinsurance” this year to support adding up to 100,000 new policies.

After agreeing to take over 147,000 policies from failing St. Johns Insurance Co. last year and 72,000 policies of bankrupt United Property & Casualty in January, Slide was approved to take over up to 25,000 Citizens policies in May, effective on Aug. 22 or a later date to be approved by the Office and Citizens.

Prior to Monday’s announcement, Slide had 175,000 policies in Florida, Artemis.bm reported, placing it among the state’s 10 largest insurers.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at rhurtibise@sunsentinel.com.

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