The role of the State government as a property insurer is continuing to decrease.  Since 2012, Citizens Property Insurance has passed off more than 1 million property insurance policies to private carriers, and another surge is to come over the next four months, said Barry Gilway CEO and president of Citizens.

Citizens’ board of governors was informed that there will be an enormous upcoming action in November. Gilway foresees a large amount of take-out policies being offered to private carriers as early as January, getting thousands of more policies in the private market

By the end of 2016, Citizens estimates that it will hold less than 450,000 policies. A massive reduction in comparison to 2012 when Citizens held 1.5 million property insurance policies, but insufficient surplus to cover the state if a major hurricane had hit.

Citizens currently has 575,000 policies issued and more than 7.5 billion dollars in surplus.

Getting to low numbers has come with controversy and questions on the way Citizens has shifted many of its policies. Letters from private carriers companies announcing they were going to acquire the homeowner’s Citizens’ policy looked like junk mail, many times ending in trash cans, preventing homeowners from opting out to remain with Citizens. Critics have complained that Citizens has used “scare tactics” by warning homeowners of a 45 percent increase in assessments for those who chose to remain with Citizens. However, the likelihood of the assessments was low, as Citizens had $7 billion to cover potential losses.

Recently, Citizens’ approach has been more consumer friendly. Citizens now sends a warning letter to residents to inform them that a private insurer will be contacting them shortly to switch into the private market. The letters have been reworded, still warning of potential assessments but having less of a doomsday feel.

State officials have been working on shrinking Florida as an insurer ever since the State’s private market has gradually rebounded from the early 2000s hurricanes. If Citizens carries too much risk, everyone in Florida can be hit with surcharges to make sure there is enough funds to cover Citizens. In essence, bigger the State insurer is, the bigger the risk that is carried down to all taxpayers.

The State’s intent was to have Citizens be the insurer of last resort. This meant, they would only take policies that the private market would not take. However, during the mid-2000s, major private carriers stopped writing policies and Citizens’ numbers increased dramatically.

Despite the fact that the numbers are shrinking, Citizens is still raising premiums on many policyholders- particularly in Southeast Florida.