A Broward County insurer is putting the final touches on a plan to take 15,000 mobile home policies out of Florida’s residential Joint Underwriting Association.
Ted Lawson, president of Federated National Insurance Co., said contracts for re-insurance are the last step before a filing, which could be made by the year’s end.
“Everything is in place to do that right now,” Lawson said.
In a departure from previous JUA takeouts, Lawson said he will not seek bonus payments of up to $50 for each policy he accepts from the overpopulated state association.
By accepting 15,000 mobile homes, Federated could qualify for a bonus of up to $750,000.
But Lawson said he was more interested in earning premium income from low-risk policies. “We’re not looking for money from the JUA. What we are interested in is good insured [customers), more than we are in trying to get money from the state,” Lawson said.
Other factors came into play. Bonus payments must be escrowed for three years while taxes have to be paid up front, Lawson said. He also said he expects faster processing of his application.
The takeout would be another step in whittling away at the overgrown JUA, which has 821,000 homeowner policies. The JUA, formed in 1992 after Hurricane Andrew created a shortage of home insurance, has grown into the third-largest insurer in the state.
The estimated claims from a strong hurricane far outstrip the JUA’s ability to pay. Legislators this year enacted a cash bonus system as an incentive for insurers to remove JUA policies.
Mobile home insurers who seek a bonus must take 10 percent of their JUA policies from Dade, Broward and Palm Beach counties and another 60 percent from other coastal counties.
Lawson said he hadn’t yet calculated how many policies would come from each county.
Lawson said Federated’s rates would be about the same as those charged by the JUA, but he expects to be more responsive to the needs of both policyholders and agents.
Federated National, based in Pembroke Pines, is primarily an auto insurer. It has 10 agency offices in Broward County and will collect about $11.5 million in premiums this year, Lawson said.
AIB Financial of Aventura has previously been approved to take 25,000 mobile home policies out of the JUA.
