Earlier Attempt to Depopulate Citizens

As Florida officials came to realize they had a serious overexposure problem with Citizens, the state's insurer of last resort, the legislature took steps in 2007 to depopulate Citizens: The law written then, still on the books, permits admitted depopulation companies to take approved batches of policies.

And this approach worked…for a while. For several years after removing the policy from Citizens, a take-out company was required to keep rates at or about the same as the homeowner was receiving at Citizens.

But the measure only served to create a revolving door. Many policies that left to the private market returned, once private insurers attempted to raise rates when they could in order to achieve some modicum of actuarial soundness. After all (and few could argue), Citizens' rates are significantly below actuarial soundness.

That's the danger: Citizens never goes bankrupt. It always has money, so long as there are insurance-holding residents against whom it can levy assessments.