TALLAHASSEE, Fla. (Feb. 12, 2013) — The R Street Institute today welcomed the vote by the board of governors of Florida’s Citizens Property Insurance Corp. transferring $30 billion of hurricane exposure from the state-run insurer to Florida-based Weston Insurance Co.
In one of the most significant depopulation agreements in Citizens’ history, Weston will take on 23,000 personal residential wind-only policies; 5,000 commercial nonresidential wind-only policies; and 3,000 commercial residential wind-only policies from Citizens’ Coastal Account. The commercial residential wind-only policies are the first ever to be depopulated from the Coastal Account in Citizens’ history.
“This agreement is a win for Florida’s taxpayers. Every policy that is transferred from Citizens to the private market reduces the likelihood or severity of post-hurricane taxes that could impact every Floridian,” R Street Florida Director Christian R. Cámara said. “However, the success of this and future take-out agreements depends on meaningful reforms by the Legislature to stop the current influx of new policies into Citizens.”
Citizens estimates the transfer will reduce by 11.9 percent the potential for post-hurricane emergency assessments on Floridians. With the $30 billion reduction in exposure, the probable maximum loss that Citizens’ Coastal Account would face in the event of a 1-in-100-year storm is roughly $840 million lower than it was before the transaction.