Florida’s Citizens Property Insurance Establishes Depopulation Working Group, Institutes Takeout Estimate Requirement

 

Among other changes to be made in response to recent consumer concerns over its Depopulation Program, Florida’s Citizens Property Insurance Corporation (“Citizens”) will establish a consumer-oriented Depopulation Working Group, as well as require takeout insurers to provide premium estimates to Citizens’ renewal customers.

Announced today, December 9, 2014, the changes are intended to provide Citizens policyholders with more information, more quickly as they determine whether or not to accept a private-market offer.

“With the unprecedented recent activity, there has been a lot of attention on the Depopulation Program,” said Steve Bitar, Citizens’ Vice President of Consumer and Agent Services.  “We’ve heard some concerns, and they have not fallen on deaf ears.  We hear you and are making a slate of changes that we think will alleviate much of the confusion.”

Since January 2014, more than 300,000 Citizens policyholders have transferred to private insurers that have been evaluated by the Florida Office of Insurance Regulation (“OIR”).

Among the changes outlined today: 

• Because the OIR is now requiring takeout insurers to provide estimates to policyholders comparing their renewal premiums to those of Citizens, companies must now either include the estimates on their takeout letter or provide a telephone number that customers can call for this information.

• Citizens will now mail “encouragement letters” to customers before the takeout insurer sends an assumption notice to policyholders.  The encouragement letter also has been rewritten to inform customers about the upcoming takeout offers.  The revamped letters will start with the February takeout.

• Citizens will establish a Depopulation Working Group to oversee and address customer questions and concerns.  The Group, which is expected to begin meeting in early 2015, will include insurance agents, and representatives from the OIR, private companies, and consumer advocates.

• Citizens has modified its Web site, www.citizensfla.com, in an effort to make it easier for customers to find additional information about the takeout process and obtain the necessary forms.

The Depopulation Program was established by the Florida Legislature as a tool to help Citizens maintain its role as the Florida’s insurer of last resort.  The Program is credited with helping Citizens dramatically decrease its policy count and exposure from nearly 1.5 million policies in November 2011, to 727,000 policies in November 2014.  Exposure during that period has fallen 56 percent from $515 billion to $229 billion, reducing the amount of potential assessments Citizens would charge all Florida policyholders in the event the State-run insurer cannot pay all of its claims.

Under the Depopulation Program, Citizens policyholders are given 60 days to decide whether they want to accept a takeout offer or remain with Citizens.  Policyholders remain eligible for Citizens prior to the expiration of their policy if a private offer with a premium equal to or less than Citizens’ premium is not available.

 

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