Clarification on Changes to the Citizens Depopulation Process

In June, 2008, the Florida Office of Insurance Regulation (“OIR”) released certain requirements for companies participating in the depopulation of Citizens Property Insurance Corporation (“Citizens”). As noted in previous e-mails, these requirements pertain to methods utilized by companies to contact the agent of record regarding permission to participate in the depopulation process.

On October 8, 2008, the OIR clarified its directive with the following additional requirements:

• Companies are required to submit the policy form, chart comparing coverages and proposed appointment agreement for new appointments only. Companies do not have to submit this information to agents that already have an appointment.
• Companies must provide a list of the policies that it would like to assume to both newly appointed agents and to agents with existing appointments.

The requirements outlined above are effective immediately and will pertain to both personal residential and commercial residential assumptions.

The original contact requirements are as follows:

• Utilize e-mail and at least one other method for contact (i.e., phone, fax or U.S. mail).
• Send out a direct solicitation to the agent of record and copy the agency principal
• Provide all agents with a minimum of 14 days to review the solicitation. This is to allow agents adequate time to research the company and make an informed decision.
• Provide a copy of the appointment contract. The takeout company may opt to provide the agent with a link to its Web site that contains the required information.
• Provide a chart identifying any differences in coverage from Citizens, which will help both the agent and the policyholder in making an informed decision.
• Provide a list of policies specific to the agent that the takeout company would like to assume.
• Provide a contact number of qualified staff to answer agents’ questions.
• Provide an overview of the takeout company’s strategy for handling claims (catastrophe and non-catastrophe).

Should you have any questions or require further information concerning the foregoing, please do not hesitate to contact Colodny Fass.

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