Citizens LogoWith a clearinghouse software provider now under contract, Citizens Property Insurance Corp. is starting to line up private insurance carriers that can remove up to 240,000 policies from the state-backed insurer.

Officials with Citizens have met with about 30 carriers to discuss the clearinghouse program and expect signed participation agreements with between five and 15 carriers before the program goes online Jan. 1, 2014, said Steve Bitar, director of consumer and agent services.

“We’re very excited about the feedback we’re getting,” Bitar told members of the Citizens board’s Actuarial and Underwriting Committee during a teleconference Monday. “Of course, the proof is in the pudding. So we’re going to put out participating agreements, wait to see who signs on the dotted line, and (welcome) those carriers as quickly as possible.”

The Citizens board on Thursday approved a $21.7 million, five-year contract with Bolt Solutions Inc. to provide the clearinghouse software. The contract could be extended another five years, bringing the value up to $44.9 million. The totals are contingent on the number of policies actually transferred to private carriers.

“This is like the iPhone for insurance in Florida,” boasted board member and committee Chairman John Rollins. “It’s going to really transform everything about the way a consumer thinks about shopping for home insurance.”

The clearinghouse, approved as part of a larger Citizens reform effort (SB 1770) by the Florida Legislature during the 2013 session, is designed to match homeowners with insurance companies willing to provide coverage.

Consumers, working with their agents, will submit information and insurance companies will then be able to make coverage offers. New customers who receive private offers within 15 percent of the price of comparable coverage from Citizens must then obtain coverage with a private insurer.

State officials hope the clearinghouse will help move homeowners into the private-insurance market instead of getting coverage from Citizens.

With the backing of the governor’s office, the agency has been shedding polices. Citizens had 1.26 million policies on May 31, but that number dropped to 1.22 million by July 31. The number topped 1.47 million in 2011.

Citizens moved 145,101 policies to private firms in the first seven months of this year, including 45,709 personal residential and coastal residential accounts to Heritage Property & Casualty Insurance Co. In 2012, seven private insurance companies assumed 277,002 policies worth $304 million in premiums.

The clearinghouse is also expected to help lower the number of homeowners covered by Citizens, notably by impacting the least-risky policies. In June, Citizens President and CEO Barry Gilway said that a realistic goal is to reduce the overall number of policies to between 700,000 and 850,000.

Board members on Monday also credited efforts to make Citizens rates more “competitive” with the private market for helping to shift policies to private insurers.

The board is still waiting for approval from the state Office of Insurance Regulation (OIR) on a requested increase to homeowners insurance that averages 7 percent statewide. Last Thursday, OIR approved an 8.7 percent increase for Citizens’ 30,025 commercial-line, residential condo-only accounts and an 8.6 percent hike for Citizens’ 2,654 commercial-line non-residential policies.

Source: News Service of Florida, Jim Turner