New property insurer authorized, Citizens depopulation number climbs following Hurricane Idalia

Florida’s Office of Insurance Regulation (OIR) granted approval to Orange Insurance Exchange last Friday to operate within the state’s property insurance market. This authorization closely follows three additional insurers entering the market in recent weeks.

Orange Insurance Exchange’s entrance into the market comes at a tumultuous inflection point, with Hurricane Idalia’s landfall causing an estimated $10 billion in damages and a series of insurers departing Florida or liquidating.

“As we begin Hurricane Idalia recovery efforts, OIR remains committed to protecting consumers and increasing options for policyholders in the voluntary market,” said Florida Insurance Commissioner Michael Yaworsky. “In the coming weeks, OIR will work in overdrive to both support policyholders in impacted areas and continue our efforts to promote a robust insurance market for consumers.”

Seven insurers were also authorized on September 1 to assume policies currently held by Citizens Property Insurance. Loggerhead Reciprocal Interinsurance Exchange, Slide Insurance Company, Safepoint Insurance Company, Monarch National Insurance Company, Florida Peninsula Insurance Company, Edison Insurance Company, and Homeowners Choice Property & Casualty Insurance Company will collectively assume approximately 202,399 new takeouts, per OIR data.

The effort comes as part of the Citizens Depopulation Program, which was established by the Florida Legislature in order to reduce the number of policies facilitated by the state-created insurer. To date, the OIR has approved a total of 482,399 policies this year. The program ostensibly allows insurance companies operating within the state of Florida, both new and existing, to assume policies currently held by Citizens.

By the end of 2023, Citizens, an intended insurer of last resort, foresees insuring approximately 1.7 million policyholders with a premium volume exceeding $5.1 billion, according to its 2023 budget. In contrast to its two-decade history, this year marks an uptick in premium levels, magnified by a 486 percent projected increase in premium and 276 percent in policyholders over five years when $877 million in premium was recorded for nearly 447,000 policyholders.

“We’ve got another insurer coming online and we’ve got more policies being taken out of Citizens – all after a CAT 3 hurricane hit Florida. If that’s not a positive sign that Governor DeSantis’ leadership in reforming insurance had a positive impact on Florida’s insurance market – I don’t know what is,” said state Chief Financial Officer Jimmy Patronis in a prepared statement sent to The Capitolist. “Even though these are positive trends for Florida’s insurance market, we have families in need, and I appreciate Commissioner Yaworsky taking steps to protect policyholders in impacted regions from being dropped by their carrier. We’ve got to always make sure we put the consumer first.”

The OIR has also issued an Executive Order targeting policyholders in Alachua, Baker, Bradford, Citrus, Columbia, Dixie, Franklin, Gilchrist, Hamilton, Hernando, Hillsborough, Jefferson, Lafayette, Leon, Levy, Madison, Manatee, Marion, Pasco, Pinellas, Sumter, Suwannee, Taylor, Union, and Wakulla counties.

The order extends grace periods for policy-related actions until October 31, 2023, prohibits policy cancellations or nonrenewals in affected areas without written request until the same date, and prevents the cancellation or nonrenewal of property insurance policies for repaired Hurricane Idalia damage for 90 days after repair completion. It also directs insurers and regulated entities to streamline claims processes.