Florida Approves Insurers to Shift Tens of Thousands of Policies from Citizens

Florida regulators have approved proposals allowing private insurers to assume tens of thousands of policies from Citizens Property Insurance Corp., aiming to reduce Citizens' market share after the peak hurricane season. Insurance Commissioner Michael Yaworsky authorized five insurers to take on up to 87,925 policies in November and December, supplementing prior approvals for nine insurers to assume up to 428,947 policies between October and December.

Known as the depopulation program, this initiative seeks to diminish Citizens, which expanded significantly as an insurer of last resort amid private market difficulties but now poses financial risk concerns for the state. Citizens currently holds approximately 770,729 policies, down from a peak of over 1.4 million in 2023, while State Farm Florida Insurance Co. is the second-largest with 643,671 policies. The depopulation program allows private carriers to request approval to underwrite certain numbers of Citizens' policies, though policyholders may face higher premiums, influenced by regulations that disqualify coverage through Citizens if private offers exceed Citizens rates by less than 20 percent.

The recent approvals designate substantial policy transfers to Manatee Insurance Exchange, Monarch National Insurance Co., and others, primarily involving residential multi-peril coverages and some commercial residential policies. State efforts to reduce Citizens' size are driven by concerns about potential financial liabilities from major hurricanes, which could trigger assessments impacting policyholders statewide. The depopulation process has slowed in the summer months as insurers monitor the ongoing hurricane season, which runs from June 1 to November 30.