NU Online News Service, Jan. 18, 12:29 p.m. EST
The Florida Office of Insurance Regulation (OIR) said it has approved Southern Oak Insurance Company to take out 14,000 policies from the state’s last-resort insurer.
According to a consent order from the OIR, Southern Oak will remove the policies from Citizens Property Insurance Corp.’s personal lines (12,000) and high risk multi-peril (2,000) accounts on or about March 8.
The proposed date to assume the policies from Citizens comes about one year after the OIR and the insurer reached an agreement about the Jacksonville, Fla.-based company’s relationship with its managing general agent (MGA), Southern Oak Management LLC.
Last year the OIR had serious concerns about the company’s agreement with its MGA—that although the insurer posted underwriting losses, its MGA was generating profits.
The OIR also had worries about Southern Oak’s wind exposure and reinsurance retention levels, but the OIR seems to be satisfied with the current business plan at Southern Oak, saying that it evaluated the reinsurance documentation and financial projections for the assumption of 14,000 policies.
Southern Oak consented to revise its business plan.
In its presentation to the state House Insurance and Banking Subcommittee on Jan. 12, Citizens said it is currently the largest property insurer in Florida with about 1.3 million policies covering $457 billion of property.
The state-run insurer said depopulation levels have decreased from record levels in 2007 and 2008 when mainly domestic insurers took out policies as part of a larger state plan to reduce Citizens’ exposure. Citizens’ personal lines account grew about 20 percent in 2010, it told the subcommittee.
According to Highline Data, Southern Oak, a Florida-only writer, posted a net income loss of about $2.15 million and an underwriting loss of about $5.61 million in 2009.
Highline Data is a part of Summit Business Media, which also owns National Underwriter.