Two developments at Citizens Property Insurance Corp. show how tough the Florida market continues to be, even after recent legislative action.

At a Citizens Market Accountability Committee meeting last week, Chief Operating Officer Kelly Booten said the state-run insurer of last resort had added about 12,000 policies in the last week, thanks in part to the corporation picking up thousands of policies canceled by Lighthouse Property Insurance Co., which is being liquidated.

This comes despite an aggressive depopulation program by Citizens in recent years.

“This is one of those stories that, unfortunately, the news is not getting better with time,” Booten said at the meeting.

And Citizens, like a number of private insurers, is struggling to complete its reinsurance program, as reinsurers have shied away from the turbulent Florida waters and have raised prices significantly. As of this week, Citizens has been able to fill only about 36 percent of its $3.4 billion reinsurance and risk transfer needs, said Citizens spokesman Michael Peltier.

Some reinsurance rates were higher than what Citizens’ leadership was willing to pay at this time, particularly for the insurer’s personal lines account tower.

Chief Financial Officer Jennifer Montero “said we’re not going to chase rates,” Peltier added.

“It’s a challenging market. She said the appetite is just not there” from the reinsurance market, he said. “That means more of our surplus is exposed.”

Without a full reinsurance tower, Citizens, with a $6.5 billion surplus, is unlikely to struggle financially. But if powerful or multiple hurricanes strike Florida this year and the surplus is depleted, it could result in an assessment or surcharge on policyholders.

“It depends on the losses, but it does raise the potential for an assessment,” Peltier noted.

Also this week, Southern Fidelity Insurance Co., which lost its financial rating after being unable to complete its reinsurance program, filed a remediation plan with regulators as it winds down operations. The Florida Office of Insurance Regulation last week had asked for the plan to be filed June 8.

“In light of its deteriorating operational results and the lack of adequate reinsurance, the Office finds that Southern Fidelity is in hazardous financial condition,” reads the June 3 consent order from OIR. The remediation plan “must, at a minimum, demonstrate Southern Fidelity’s ability to quickly provide for a successful transition of its policies to another insurer, fund a solvent run-off of its current and incurred-but-not reported liabilities, address potential reserves inadequacy issues, and manage its non-Florida policies and losses.”

The OIR has not made the remediation plan public, and a company leader said he could not discuss details at this time.

“The state is active on this right now, so there’s nothing we can add at this point,” said Michael Millette, co-founder and managing partner at Hudson Structured Capital Management.

Hudson took a majority stake in Southern Fidelity in 2020 when it invested $20 million in the Clearwater-based insurer.

Florida lawmakers in late May approved significant insurance reform measures, including a one-time, lower-level reinsurance fund. Critics have said the reforms should help reduce roof claims and litigation in coming years but will likely not be enough to help some insurers that have been unable to complete their reinsurance programs this summer.