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TAMPA — Homeowners Choice Property & Casualty Insurance Co. has been approved by the Florida Office of Insurance Regulation to assume 50,373 policies from Citizens Property Insurance Corp., the state-run insurance company.
Homeowners, which is a wholly owned subsidiary of HCI Group (NYSE: HCI; recent price: $33.21), is one of 10 private insurers approved to “take out” nearly 400,000 policies from Citizens in an effort to reduce its risk and return Citizens to its mission as being the insurer of last resort.
Citizen policyholders will receive notice and can elect to remain with Citizens or transfer to the private insurer. If they switch to private insurance, they are no longer subject to Citizens' assessments, which could reach 45% of their premium in the event of a major storm, according to Citizens. With a private insurer, they would only be subject to a 2% assessment.
"Policy assumptions from Citizens allow us to hand-select the highest quality policies," Scott Wallace, president of Homeowners Choice, says in a release. "We remain committed to adding policies that satisfy our strict underwriting guidelines. While a small amount of attrition from opt-outs related to the assumption is inevitable, this assumption will allow for balanced growth."
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