Citizens Issues Additional Guidance Regarding Takeout Requirements: May 13

In implementing an Order issued by Florida Insurance Commissioner Kevin McCarty on March 11, 2008 concerning Citizens Property Insurance Corporation’s (“Citizens”) Depopulation Plans, Citizens set forth, among other requirements, that policyholders must be notified when their policy has been selected for assumption by an assuming insurer, as well as whether the policyholder’s agent of record refused to participate in the assumption process.

Those requirements include the tracking of agents who refuse to participate.

The following is additional guidance issued by Citizens with respect to satisfying these new requirements:

• Takeout companies are required to track all agents (and related policy information) who have refused to participate in the takeout process and submit this information to Citizens by the deadline published in the revised 2008 Assumption Calendar. Citizens will then mail out notices informing the policyholders of the agent’s refusal. This will allow the affected policyholders the opportunity to address the refusal with their agent and possibly receive their agent’s approval in time to be included in the current takeout.

• Takeout companies are required to track all agents (and related policy information) who, after discussing with the policyholder, decide to participate in the takeout process and submit this information to Citizens by the deadline published in the revised 2008 Assumption Calendar.

• Takeout companies are required to keep a record of all agents who refuse participation along with an explanation for the refusal.

• When contacting an agent regarding a potential takeout policy, takeout companies are required to provide each agent with the policy form to be used, the appointment contract and a copy of the most currently available company financial statement.

• Upon request, takeout companies must provide agents with a list of the policies targeted for assumption.

• Upon request, takeout companies must provide agents with a list of the policyholders who will be sent the declination letter.

• Companies must allow at least seven days for the agent to respond to a request to assume polices.

Should you have any questions concerning the foregoing, please do not hesitate to contact this office.

 

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