OIR approves Mainsail as newest domestic property insurer; Citizens in line to shed nearly 300,000 policies

by | Aug 15, 2023



  • Florida’s Office of Insurance Regulation (OIR) has granted authorization to Mainsail Insurance Company, a Texas-based property and casualty insurer, to operate within the state as a domestic insurer.
  • Mainsail Insurance Company has been approved to provide 17 different types of insurance, including auto, property, and commercial coverage.
  • The OIR also announced that it has approved insurance companies to assume 280,000 policies from Citizens Property Insurance Corporation by October 2023, allowing private insurers to take on a significant number of policies from the state-run insurer.

Florida’s Office of Insurance Regulation (OIR) this week granted authorization to Mainsail Insurance Company, a property and casualty insurer headquartered in Texas, to function as a domestic insurer within the state.

According to OIR data, the insurer has been approved to offer 17 varying lines of insurance including auto, property, and commercial coverage.

The approval of Mainsail’s application marks the second company to be allowed in as an authorized insurer following the passage of HB 837 earlier this year. The bill, among other provisions, sought to reduce frivolous litigation by reserving attorney fee multipliers, requiring proof that an insurer breached its agreement with a policyholder before a lawsuit can be filed, and preventing insureds from transferring their unilateral right to receive attorneys’ fees to contractors.

At the time of the bill signings, Florida homeowners paid nearly three times higher than the national average for home insurance, according to the Insurance Information Institute, partly as a result of an exodus of insurers that have left the state. At the start of the current calendar year, 15 insurers have been deemed insolvent since 2020, leaving Floridians with a dwindling number of market options.

“The addition of Mainsail Insurance Company to the Florida market is evidence that recent legislative reforms are having a positive impact for consumers,” said Insurance Commissioner Michael Yaworsky.

The OIR also disclosed that it has approved insurers to assume 280,000 policies from Citizens Property Insurance Corporation through October 2023. OIR documents show that on June 28, Safepoint Insurance Company submitted a proposal to acquire 30,000 lines of coverage from Citizens. Similarly, Southern Oak Insurance requested to take on 25,000 policies from Citizens. Both motions were approved.

The effort comes as part of the Citizens Depopulation Program, which was created by the Florida Legislature in order to reduce the number of policies facilitated by the state-run insurer. Per prior statements, the OIR has already approved 91,000 policies through the first half of 2023.

The program ostensibly allows insurance companies operating within the state of Florida, both new and existing, to assume policies currently held by Citizens. Last month, state regulators approved proposals by Slide Insurance Co. to take as many as 25,000 policies from Citizens and Loggerhead Reciprocal Interinsurance Exchange to take as many as 1,000 policies. The action comes as a result of the passages of Senate Bill 2-A and Senate Bill 2-D during a property insurance special session conducted last year.

Citizens, which was created as an insurer of last resort, has become the largest property insurer in the state as private companies have dropped customers and raised rates because of financial challenges related to natural disasters and rapidly inflating costs of labor and materials to repair or replace damaged property.

One of the most glaring problems facing Citizen is that it’s significantly less expensive to get insurance through Citizens than it is going through the private market.

Citizens CEO Tim Cerio noted last month during an insurance hearing that agency projections may be lower if depopulation measures prove to be effective at moving some portion of property owners back into the private market as reforms enacted over the last several years begin to take effect.

He further outlined Citizens’ plan to bring premiums up so that they are in line with private insurer premiums – while at the same time allowing time for the private market’s premiums to more closely reflect an actuarially sound premium level.

Earlier this year, the Citizens Board of Governors internally sanctioned a proposal that grants organizational leaders the opportunity to petition the OIR for authorization to implement a 14.2 percent hike in policy premiums.

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