This move will be in contrast to the past two years; where there was a “mad dash” to move nearly 500,000 policies from the state-backed insurer to lessen Florida’s financial exposure. Gilway says future efforts will be gradual, moving about 100,000 policies every year.
Gilway predicts the number of Citizens’ policies to drop from the current 928,546 to about 850,000 by the end of the year. The goal is to bring the total number of policies to around 650,000 policies by the end of 2017.
“We think about 650,000, 625,000, is about as low as you’re ever going to get,” Gilway said after a speech to the Economic Club of Florida at the Florida State University Alumni Center on Thursday.
Citizens’ policies are down from 1.26 million as of May 31, 2013. The year before, the number was 1.43 million policies.
To bring the number down to 600,000, Gilway believes the “grossly inadequate rates” on coastal accounts should be closer to the rates offered by private insurers.
For the program to take hold, Gilway says there must be the addition of renewal policies in the newly established electronic clearinghouse, where qualified insurers can choose from the least precarious residential policies.
Beginning last January for new policies, the clearinghouse will expand in November to include renewal policies. To obtain coverage through the clearinghouse by a private, a policy must be within 15 percent of Citizens’ premium for new single-family policies. The policy then goes to a private carrier.
Even after the introduction of the clearinghouse, where private vendors collected nearly 3,300 new residential policies, Citizens will still average about 16,000 new policies each month, 500 of which are coastal accounts—a monthly average down from 26,000 the same time last year.
The average number of new coastal policies added each month has not changed.