Florida’s state-backed property insurer is considering investing in private insurers to the tune of $350 million, with the hopes these insurers would then take up to 300,000 policies. The move is an attempt by Citizens Property Insurance Corp. to reduce its hurricane exposure and the likelihood of policyholder assessments.
Among the insurers lining-up to participate in the program are the Tower Hill Insurance Group, United Insurance Holding Group, and American Integrity Insurance Group. Other insurers expressing interest in the program include Bankers Insurance Group and several new companies.
Tim Meenan, representing the Tower Hill and American Integrity, said the program could rejuvenate what has been a weak depopulation trend in recent years.
The loan program is slated to cost just a bit more than the $5 billion in surplus Citizens currently has. The surplus notes are for a term of 20 years and limited to $50 million each. For the first three years, the insurer would only be required to pay the interest on the loan, which is set at the rates on 10-year U.S. Treasury bonds.
The policies must be retained for at least 10 years and for the first three years rate increases are capped at Citizens statutory rate cap of 10 percent. The minimum total insured value an insurer must take to qualify for the program is at least $5.5 billion.
The participating insurers must also have been actively writing property insurance for at least two years and have a risk based capital ratio of 300 percent and minimum surplus of $25 million. They must also have in Florida direct written premiums of at least $50 million and enough reinsurance.
Topics Carriers Florida Excess Surplus
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