Additional Information from Citizens Regarding Clarification of Order 94539-08 Regarding Depopulation Programs

On March 31, 2008, Citizens Property Insurance Corporation (“Citizens”) issued a statement concerning new procedures to be followed as a result of Florida Insurance Commissioner Kevin McCarty’s March 11, 2008 Order regarding Citizens’ depopulation programs. In that statement, Citizens stated that the failure of an agent to respond to each assuming insurer’s request to assume policies associated with that agent will be deemed as a consent to the assumption.

Please be advised that Citizens has reversed its position on this issue and has indicated that failure of an agent to respond will be deemed to be a refusal of the assumption. This is consistent with Citizens’ prior requirement that the assuming carrier obtain an affirmative response from the agent in order for the policy to be assumed.

Additionally, Citizens has made modifications to the 2008 assumption calendar and policyholder letter that was disseminated yesterday (to view, click here). The latest versions of the calendar and policy letter are attached hereto. Citizens has advised that the deadline for the requirement and deadline letter for the May assumption has been changed from April 4th to April 11th, and that Citizens will provide the letter at the beginning of next week.

Based on the aforementioned changes, Citizens’ March 31, 2008 statement concerning the new depopulation procedures has been revised as follows:

Order 94539-08, issued by Commissioner McCarty on March 11th, 2008, contained several provisions that require Citizens to amend its process for future assumptions.

Consistent with that Order, and to provide guidance to assuming insurers, Citizens has adopted the following procedures, which have been reviewed and approved by the Florida Office of Insurance Regulation:

• All policies, including those of agents who have previously declined to participate in the assumption process, are available to be assumed, except as provided below:
• Policies that have already been assumed, are in cancellation status or fall within the blackout period are excluded from the assumption process
• Assuming insurers are not required to get permission from the corporate office of any agent prior to selecting policies to be assumed
• Agents must respond to each assuming insurer’s request to assume policies associated with that agent
• Assuming insurers must provide Citizens with a complete list of policies associated with agents that refused to consent to the assumption
• Citizens will send a letter to policyholders associated with agents that refused to consent to the assumption and inform those policyholders that they may contact the assuming insurer to be written directly with a new agent of record
• Policyholders who voluntarily accept the offer to be written directly will not be included in the assumption process.

The Order became effective upon issuance and applies to the May 20th, 2008 assumption (see attached calendar).

Should you have any questions or concerns, please do not hesitate to contact this office.

 

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