Florida is continuing to offload policyholders from its state-backed insurer Citizens onto private insurance companies — potentially boosting business for Bermuda’s reinsurers.

Insurance regulators in the Sunshine State have approved four companies to take up to 97,231 policies from Citizens — which would reduce its total number of policyholders by more than ten percent.

Citizens’ “depopulation” programme has helped to reduce the number of in-force policies from a peak of 1.4 million in April 2012 to 933,422, as of June 30 this year.

Citizens remains the hurricane-prone state’s largest insurer with a market share of almost 15 percent.

Florida also has a state-run reinsurance fund, the Florida Hurricane Catastrophe Fund. State involvement in the insurance and reinsurance market has left Florida on the hook for potential huge losses that would follow a direct hit by a powerful storm.

Florida homeowners pay some of the highest property insurance rates in the world and hence insurance is a hot-button political issue.

The state has been seeking ways to offload more of the publicly shouldered risk onto the private sector.

Brad Kading, president of the Association of Bermuda Insurers and Reinsurers (ABIR), told The Royal Gazette yesterday: “Depopulation from Citizens is good for Florida taxpayers and consumers. As insurers grow this creates opportunity for Bermuda reinsurers.”

He added that Florida consumer groups support both Citizens’ use of reinsurance and depopulation of state-backed insurer.

The latest depopulation move involved the Florida Office of Insurance Regulation giving the green light for about 91,500 personal multiple peril residential policies to be taken, as well as 5,732 commercial lines policies to be taken from Citizens’ books, according to a statement. Those policies are slated to be removed in October.

Taking policies are: Heritage Property & Casualty Insurance Co, which can take up to 22,400 policies; SafePoint Insurance Co, which can take up to 35,500 policies; Tower Hill Preferred Insurance Co, which can take up to about 22,250 policies; and Weston insurance Co, which can take up to about 17,600 policies.

Citizens has also been using a Bermuda special purpose insurer, Everglades Re Ltd, to transfer some of its risk. Earlier this year, Everglades completed a $1.5 billion catastrophe bond transaction, the largest of its kind in history.

The travel expenses of those involved in hatching the Everglades deal have been attacked by Florida Governor Rick Scott.

Mr Scott has called for Citizens to change its travel policies after the insurer’s officials travelled to London, Zurich and Bermuda as part of securing a $3.1 billion risk transfer programme, which included the Everglades catastrophe bond.

According to the Sun-Sentinel newspaper, Citizens’ board of governors chairman Chris Garner was reimbursed at a slightly higher amount than Citizens’ guidelines.

Mr Gardner’s expenses for a two-night hotel stay in Bermuda exceeded the guidelines by a total of $104. He repaid the overspend.