Information from Citizens Regarding Clarification of Order 94539-08–Takeout Programs

On March 11, 2008, Florida Insurance Commissioner McCarty issued Order 94539-08 (the “Order”) which contained various new requirements with respect to Citizens Property Insurance Corporation’s (“Citizens”) takeout programs, including the requirement that policyholders be notified that their policy was selected to be assumed in the event the agent declines to participate in the assumption process.

In response to the Order, Citizens has issued the following statement pertaining to these new procedures:

Order 94539-08, issued by Commissioner McCarty on March 11th, 2008, contained several provisions which require that Citizens amend its process for future assumptions.  Consistent with that Order, and to provide guidance to assuming insurers, we have 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;
• 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;
• 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 concerning the foregoing, please do not hesitate to contact this office.

To unsubscribe from this newsletter, please send an email to ccochran@cftlaw.com.