Florida insurance agencies and agents have just a few days left to decide whether or not to agree to the state-backed property insurer’s new appointment guidelines.
Citizens Property Insurance Corp. revamped its agent appointment process in September in preparation for the implementation of the new web-based clearinghouse, which is slated to go live on January 27.
Citizens spokesperson Michael Peltier said agency owners and agents have until midnight on December 15 to agree to the new contracts or have their current appointments terminated.
As of last week, some 14 percent of Citizens-appointed agents and nine percent of agency owners or principles had yet to accept the new contracts. Citizens is sending out an email to those agency owners and agents directing them to accept the new contracts through the Agent Certification System portal.
Citizens has been using only an agent appointment agreement to contract with an agency and to appoint its agents.
That system is being scrapped and replaced with a new Agency Agreement, which will be a contract between Citizens and an agency through the agency owner or principal. A revised Agent Appointment Agreement will now be the contract between an individual agent and Citizens.
There are no new fees associated with the new appointment agreements and an agency and agent renewal dates will not change.
However, if an agency owner or principal fails to accept the new agency appointment by the deadline, then the agency will have its contract terminated along with all of its agents, regardless of whether they have signed a new Citizens contract.
If an agent fails to accept the new appointment not only will their contract be terminated, all their in-force Citizens policies will be transferred to either an eligible agent in the same agency or to Citizens Insurance Services.
To secure an appointment after the December 15 date, an agency and agent would have to reapply for an appointment. Among other things, the affected party would have to document they have an appointment with at least one private insurer, have at least $500,000/$1 million in error and omissions coverage and pay a $125 fee.
The new Citizens appointments reflect many of the changes enacted by lawmakers earlier this year as they created the statutory framework for the clearinghouse.
One major change is the elimination of so-called “consumer choice,” where an agent or consumer could choose to reject an offer of coverage from a private insurer and stay in Citizens.
Instead, a policy must be held in the clearinghouse for 48 hours to provide private insurers time to adequately access the risk. And the clearinghouse will ensure that new applicants receiving an offer of coverage within 15 percent of Citizens rates will be ineligible for Citizens.
But on the upside, agents will own any policy that expires with Citizens or any insurer that participates with the clearinghouse. And agent commissions paid by insurers participating in the clearinghouse must be equal to the greater of Citizens or the usual and customary commissions paid for that line of business.
Captive agents will also be allowed to sign limited servicing agreements with insurers removing policies through the clearinghouse.