Heritage to Assume More Policies from Fla. Citizens

The Citizens Property Insurance Corporation Board of Governors has approved Florida-based Heritage Property and Casualty Insurance Co. to remove approximately 60,000 mulitperil properties from the state's insurer of last resort's personal lines and coastal accounts.

The Citizens board's vote for approval comes six days after the Office of Insurance Regulation approved the agreement.

Citizens says 40 percent of the policies come from  Broward, Palm Beach and Miami-Dade counties, a region that has experienced higher than average losses.

Should all policies change hands, Citizens says it will pay Heritage approximately $52 million. Heritage has already assumed more than 54,000 policies under a separate agreement with Citizens approved last fall.

Citizens says the plan could lower the last-resort insurer's potential exposure by $16 billion and cut losses by $439 million in the event of a once-in-a-century storm.

“This is a great opportunity to place another 60,000 policies into the hands of one of the most well capitalized companies in the Florida marketplace,” says Citizens President and CEO Barry Gilway in a statement. “I think the logic behind this agreement is compelling.”

As part of the agreement, Heritage will offer coverage comparable to that offered by Citizens at the same effective rates. Further, Heritage will maintain Citizens' statutorily mandated rate glide path — currently rate increases of no more than 10 percent per year — for three years for all assumed policies and will retain all assumed polices for at least three years, according to Citizens.