Florida’s state-backed property insurer has tapped a Connecticut-based firm to operate a new clearinghouse where new and renewal policyholders will be shopped to the private market before they are eligible for coverage.
The Citizens Property Insurance Corp. board of governors has formally agreed to the contract with the Farmington, Connecticut-based Bolt Solutions Inc.
Bolt will receive up to $44.9 million over 10 years to create and maintain the clearinghouse, which is scheduled to become operational January 1, 2014.
Bolt Solutions, which has offices in Sarasota, provides similar services for small businesses and consumers in all states. The firm also offers clearinghouses for some insurers.
The centerpiece of this year’s legislative property reforms, the new clearinghouse is intended to help depopulate and rein-in the number of new policies in Citizens.
Under the new law, Citizens will create a database through which every new applicant or renewal policyholder will first be filtered so that private insurers can review the policies and potentially make an offer of coverage.
If a new applicant receives an offer of comparative coverage that is within 15 percent of Citizens rates, the applicant will not be eligible for Citizens coverage and must obtain coverage through the private market.
Citizens renewal policyholders that receive an offer of a comparative policy with a premium that is equal to or less than their Citizens policy likewise will have to find coverage in the private market.
Citizens Board of Governor’s Chair Chris Gardner said the hiring of Bolt Solutions marks a critical step toward helping consumers find a more suitable offer of coverage in the private market.
“Florida’s insurance market is expanding with private-market options for residential insurance becoming increasingly available,” said Gardner in a statement. “By helping match homeowners with these options, the clearinghouse will provide an invaluable service.”