Citizens Depopulation & “Churning”!

No telling what idea’s might bob to the surface during this Friday’s depopulation summit in Tampa. (See NOTE #1 below for details).

Sponsored by Citizens Depopulation Committee and open to all comers, it’s a wide open idea exchange likely to produce some real “doozies”, which is fine, but…it’s also likely to feature a disproportionate emphasis on takeout ideas both new and old, and..that’s not so fine!

Don’t get me wrong, just like “take-outs” themselves, gathering idea’s on “take-outs”  is a good thing.

But, employed exclusively, the concept of “take-out” will not “depopulate” Citizens.

That’s because depopulation is about reducing policy count which doesn’t occur when more policies are coming in the front door than are being taken out the back or when those coming in the front door are actually those taken out the back; called “churning”.

Citizens has not been very successful keeping policies out over the years, but…it’s done a marvelous job taking them out.

Fact:  1,501,794 policies have been “taken out” since 2003–that’s more than Citizen’s current number of policies; a number which is triggering all sorts of well deserved alarms.

Fact: not included in this number were the nearly 900,000 “taken out” during the mid-90’s from Citizens predecessor the FRPCJUA.  That means the total taken out exceeds 2.4 million policies.

Fact: a substantial majority of those recently removed (927,259 to be exact) were “take-outs” only from the Personal Lines Account (PLA)…and, all were taken out after the ’04/’05 storms.   Over 50,000 have been taken out so far in 2012.


Albert Einstein once defined insanity as doing the same thing over and over while expecting different results. In this context the result of the insanity is another, even more overlooked, fact:

“Despite massive, record level, policy removals, Citizens policy count is essentially the same as it was when depopulation began; indeed,  it’s higher and still climbing!!”

Huh? All that work, all that expenditure of time, effort and public consternation and what’s been accomplished?  Nothing, nada…zip–we’re right back where we started!

One more fact about “churning”…it’s easier!

Keep out involves reducing coverage or increasing prices or telling someone “no”!

Churning, on the other hand, distracts from the difficult issues of “keep-out” deflecting blame from those who possessed the power to keep those policies out of Citizens in the first place.

Just look at the fallout from current and well-intended “keep-out” initiatives by the Citizens board.   All are meeting with varying degrees of opposition from virtually every political corner.  Even this Friday’s summit, designed to garner idea’s from everyone, is viewed by some consumer groups mostly as a venue for protest.  (See NOTE#2 below)  

Fact: last year Citizens received 569,327 new applications.  This year, despite some modest legislative enactments to discourage them, new applications are nearly unabated with 110,401 in just the first three months alone.

I look forward to Citizens summit, or any forum for that matter, that fosters an open discussion about effective measures for keeping policies out of Citizens–especially if they come from areas where the private market is “… stable and competitive!”


NOTE #1:  Citizens Depopulation Committee workshop is to discuss ways to reduce the number of policies the state-backed home insurer carries. It is scheduled for 9:00AM to noon Friday at the Grand Hyatt Tampa  Bay. It will be available via conference call at 1(855)312-8651, conference ID:4458606638#. For an agenda, contact Sara Golding, 1 (800) 807-7647, extension 3874.

NOTE #2A blog by former Insurance Consumer Advocate, Sean Shaw, urges readers, including public adjusters, to attend Citizens Depopulation Summit because…state representative Bryan Nelson (House Insurance Chairman and insurance agent) will deliver opening remarks which Shaw says “should speak volumes” on why “every stakeholder’s voice should be heard.”

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  1. […] a 2012 blog on the problem of churning I […]

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