A key players in the program to transfer policies from Florida’s Citizens Property Insurance Corp. over to private “take-out” insurers is moving to the private sector, and to one of the program’s biggest participants.
Scott Wallace, Citizens’ departing chief executive officer, was quickly able to find a new position in the private sector as the president of the property/casualty division of Homeowners Choice Inc., a Florida domestic insurer.
In recent years, Citizens has begun depopulation efforts by raising rates and moving policies into private insurance companies. The goal of the take-out program is to reduce the burden of Citizens while attracting new insurance companies to the state. Although Citizens has seen some success in moving policies back into the private market, many of the early take-out companies have been thinly capitalized.
Homeowners Choice Inc. was one of the insurance companies created through Citizen’s take-out program. The company now insures thousands of homeowners polices once held by Citizens. Some experts have found Wallace’s choice to work for Homeowners Choice interesting, due to the fact that his new company was built up by the very takeout program he ran for the last five years.
One of the biggest criticisms of the take-out program from its detractors is the argument that these private companies were able to “cherry-pick” the best policies from Citizens, those with the most profit potential and lowest risk. While Wallace was not with Citizens during the launch of the take-out program, he does have a unique insight into the policies Homeowners Choice has received (and might receive in the future) from Citizens.