Florida's Citizens Property Insurance Corporation says itspolicy count has dropped below 1 million for the first time since2006, a development that industry representatives called a step inthe right direction for the state's property market.

Florida Citizens, intended to be the state's insurer of lastresort, grew to become its largest writer of propertyinsurance.

In a statement, Florida Citizens says its policy count stood at942,321 as of Monday, "a drop of 36% from a high of nearly 1.48million policies in October 2012," with its exposure falling to$302 billion from $515 billion in November 2011.

"Recent takeout efforts, legislative initiatives and animproving private market have combined to push Citizens' exposureto the lowest level in more than seven years, reducing the risk onall Florida policyholders who would be on the hook if Citizenscannot pay claims following a major storm or series of events,"Florida Citizens says.

The statement adds that nearly 500,000 policies have beenshifted to the private market over the past few years as a resultof depopulation efforts.

"Following eight years with no major storms, Florida'sfinancially sound private insurance market has begun to rebound asnew investors and companies look to expand and increase theirfootprint in the Florida marketplace," Florida Citizens adds.

Samuel Miller, executive vice president of the Florida InsuranceCouncil, says, "It is extremely encouraging and a most significantsign the private homeowners insurance market in Florida isstabilizing and growing."

And there could be more good news to come, he notes. FloridaCitizens recently launched a clearinghouse designed to lower its policycount. When homeowners seek coverage with Citizens, aCitizens-appointed agent will enter their information into theclearinghouse, which will seek offers of coverage fromprivate-market companies.

Miller says the under-1-million milestone occurred almostentirely before the clearinghouse got underway late lastmonth. "We can expect  a further decline in thesize of Citizens," he says. "As Citizens returns to its proper,smaller role, it will be stronger financially and the magnitude ofstatewide assessments after a major hurricane will be less."

Donovan Brown, state government relations counsel for theProperty Casualty Insurers Association of America, says instatement, "The sustained reduction of Citizens policies willcontinue to enhance the Florida insurance market for the benefit ofthe consumer. While we still have much work ahead of us toimprove our market from the failed policies that balloonedCitizens, Florida's residual market slipping below 1 millionpolicies is proof we are moving in the right direction inprotecting Floridians."

Brown says that, barring a major catastrophe, PCI is "cautiouslyoptimistic" that the clearinghouse as well as other takeoutefforts, "will continue to drive down the size of Citizens andreduce the exposure of a potential hurricane tax on Florida'sconsumers.  We look forward to the day when Citizens isreturned to its true purpose as Florida's insurer of lastresort."