PLA Non-Bonus Assumption Agreement



 Exhibit 10.10 
 PLA Non-Bonus Assumption Agreement 
 

 
 THIS ASSUMPTION AGREEMENT (the “Agreement”) is executed as of the 19 day of June, 2007
(“Execution Date”) by and between Homeowners Choice Property and Casualty Insurance Company, a Florida licensed and authorized insurance company (“Insurer”); and Citizens Property Insurance Corporation, an entity created by the
Legislature of the State of Florida pursuant to Subsection 627.351(6); and any successor entity (“CITIZENS”). 
 RECITALS

 WHEREAS, Insurer and CITIZENS desire, pursuant to this Agreement, to have the Insurer remove up to a maximum of 20,000 Policies by
Assumption from CITIZENS in accordance with the terms and conditions of this Agreement. 
 WHEREAS, CITIZENS desires to allow qualifying
insurers to participate in the Program and remove policies from CITIZENS; 
 WHEREAS, Insurer has made application to CITIZENS to participate
in the Program; and 
 WHEREAS, CITIZENS finds the Insurer eligible to participate in the Program. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties hereto do covenant and agree as follows:

 DEFINITIONS 
 For purposes of this Agreement: 
 A. “Aggregate Losses” shall mean those losses which include, but are not Limited to,
compensatory punitive, bad faith and other damages arising from, and all loss adjustment expenses relating to the adjustment or defense of any and all claims with respect to losses on policies of insurance of Citizens or Issuer. 
 B. “Assumed Premium” shall mean Initial Assumed Premium as adjusted by a monthly remittance and bordereau process developed by the Insurer and
CITIZENS to account for policy cancellations, return premiums, policyholder requested coverage changes, and Returned Policies after the Assumption Date, with the positive and negative adjustments. 
  

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 PLA Non-Bonus Assumption Agreement 
  
 C. “Assumption” shall mean the transference of risks from CITIZENS to the Insurer on a Removed Policy, whereby the
Insurer is deemed to have directly issued the Removed Policy as provided in subparagraph (p)6 of Subsection 627.351(6) (as added by Chapter 2007-1 Laws of Florida). 
 D. “Assumption Date” shall mean that date upon which the Assumption of a Removed Policy occurs. 
 E. “Assumption Procedures” shall mean those procedures applicable to the depopulation of CITIZENS policies under subparagraphs (p)3-6 of Subsection 627.351(6), Section 627.3511, and Section 627.3517, Florida Statutes,
and this Agreement, as set forth in Exhibit D attached hereto. 
 F. “Ceding Commission Rate” shall be as defined in Exhibit B
attached hereto. 
 G. “Independent Auditor” shall mean a certified public accountant or certified public accounting firm, licensed
in the State of Florida, to perform professional auditing services and who is without bias with respect to the outcome of the audit services and with respect to the Insurer. 
 H. “Initial Assumed Premium” shall mean Written Premium, less the Written Premium earned by CITIZENS with respect to the Removed Policies as of
the respective Assumption Dates of such policies. 
 I. “Initial Notice” shall mean a notice, in substantially form attached as
Exhibit F, mailed to a policyholders more than thirty days prior to the Assumption Date of a Tagged Policy. 
 J. “Office” shall
mean the Florida Office of Insurance Regulation. 
 K. “Parties” shall mean the Insurer and CITIZENS. 
 L. “Plan” shall mean the Plan of Operation of CITIZENS, as amended. 
 M. “Rejected Policy” shall mean any Tagged Policy the offer of which has been rejected by a policyholder as provided in section 3.E. of this
Agreement. 
 N. “Replacement Policy” shall mean a policy offered or issued by Insurer on its own policy forms, to take effect upon
the expiration or cancellation of a Removed Policy. 
 O. “Removed Policy or “Removed Policies” shall mean a CITIZENS Policy
that is assumed by the Insurer under this Agreement and is not a Rejected Policy. 
 P. “Program” shall mean any program for the
depopulation of policies by assumption or other take-out as approved by CITIZENS and the Office pursuant to subparagraph (p)3-6 of Subsection 627.351(6). 
 Q. “Returned Policy” shall mean a Removed Policy that is returned to Citizens as provided in section 3.F. of this Agreement. 
  

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 PLA Non-Bonus Assumption Agreement 
  
 R. “Subsection 627.351(6)” shall mean subsection 627.351(6), Florida Statutes (2006), which is Citizens’
enabling statute. 
 S. “Tagged Policies” shall mean the Policies identified by CITIZENS policy number and expiration date on
Exhibit A or any supplement thereto. 
 T. “Written Premium” shall mean the gross written premium of CITIZENS on the Removed
Policies, less policy cancellation and return premiums, as of the respective Assumption Dates of such polices. Written Premium shall not include fees or surcharges invoiced for collection by CITIZENS on the Policies, including a(n)
(i) market equalization surcharge, (ii) CITIZENS policyholder surcharge, (iii) nonhomestead policyholder assessment, (iv) Citizens additional policyholder assessment, (v) regular assessment, (vi) emergency assessment,
(vii) tax-exempt surcharge, (viii) reinsurance or catastrophe financing surcharge, or (ix) other fees, taxes, assessments, or surcharges imposed on CITIZENS policyholders as determined by CITIZENS. 
 TERMS AND CONDITIONS 
 1. Term
of this Agreement. This Agreement shall terminate 18 months from the date it is signed. No Assumptions may occur after the Agreement terminates. 
 2. Agreement to Remove Policies. 
 A. The Insurer and CITIZENS shall, prior to an Assumption
Date, agree upon those Tagged Policies eligible to be removed under the Program by the Insurer on the Assumption Date and shall set forth those Policies by CITIZENS policy number and expiration date on Exhibit A or any supplement thereto, which
Exhibit A or supplement shall be attached hereto and made a part hereof by reference. 
 B. Pursuant to this Agreement and the Assumption
Procedures, the Insurer shall remove by Assumption all of the Tagged Policies set forth on Exhibit A or supplements thereto, if available for removal on the Assumption Date pursuant to this Agreement and as approved by the Office. 
 3. Terms of Assumption. 
 A.
Liabilities. 
 (i) With respect to a Removed Policy, the Insurer is liable and obligated to pay all Aggregate Losses occurring on or
after 12:01 A.M. Eastern Standard Time on the Assumption Date of a Removed Policy and CITIZENS has no obligation or liability with respect to such Aggregate Losses. 
 (ii) The Insurer, in addition, agrees to assume and undertake all other obligations with respect to the Removed Policies in the manner provided herein. 
 (iii) CITIZENS shall remain liable for all Aggregate Losses for the Removed Policies occurring prior to the Assumption Date, and all Aggregate Losses
for the Rejected Policies and the Returned Policies, and the Insurer shall have no responsibility with respect to such losses. 
 (iv) The
Insurer shall comply with all applicable Assumption Procedures. 
  

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 PLA Non-Bonus Assumption Agreement 
  
 B. Notices. 
 (i) The cost of any notice and ancillary documentation to current CITIZENS policyholders to effectuate Assumption of the Policies shall be borne equally by the Parties, except that the cost of the Initial Notice shall be borne solely by the
Insurer. If CITIZENS bears the cost for any expenditures, the Insurer agrees that its portion of such costs may be withheld from any Assumed Premium paid to Insurer by CITIZENS pursuant to this Agreement or any amendments or addenda to this
Agreement. In the event CITIZENS, for whatever reason, does not withhold the Insurer’s portion of such cost from any Assumed Premium paid to Insurer, Insurer agrees to pay said sum to CITIZENS within thirty (30) days of its receipt of a
billing statement from CITIZENS. 
 (ii) The parties shall coordinate the mailing of any documentation or notices required by this
Agreement. 
 C. Assumed Premium. 
 (i) CITIZENS shall pay by wire transfer to the Insurer the Assumed Premium multiplied by 1,000 minus the applicable Ceding Commission Rate on or before the 20th day following the Assumption Date. Any subsequent
amounts due to or from CITIZENS as a result of the monthly remittance and bordereau process shall be remitted to the appropriate Party net of Ceding Commission within ten (10) days following the end of each month without interest. 

D. Servicing of Policies. Commencing on the Assumption date of a Removed Policy: 
 (i) Until a Removed Policy is renewed onto an Insurers policy form, on behalf of the Insurer, CITIZENS shall process endorsements and cancellations and
provide other policy services with respect to the Removed Policy. The consideration for services to be performed by CITIZENS on behalf of the Insurer is specifically encompassed in the Ceding Commission Rate referenced in Exhibit B attached hereto.

 (ii) The Insurer is responsible for offering and processing offers of renewal coverage with respect to its Replacement Policies,
utilizing its approved rates and forms. Insurer is responsible for all policyholder services with respect to its Replacement Policies. 
 E.
Rejected Policies. 
 The parties acknowledge that policyholders of Tagged Policies have the right to reject Insurer’s offer of
coverage and to remain policyholders of Citizens, Accordingly, Insurer shall mail to the policyholders the Initial Notice disclosing such right. After the mailing of the Initial Notice, and prior to the Assumption Date, the Insurer shall be
responsible for obtaining written confirmation from any Policyholder requesting that their Policy not be removed from CITIZENS. Such information shall be remitted to CITIZENS in an electronic format acceptable to CITIZENS. 
 F. Returned Policies. 
 Any
policyholder under a Removed Policy may return to CITIZENS within thirty days after the Assumption Date and shall be reinstated by CITIZENS. The insurer shall 

  

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 PLA Non-Bonus Assumption Agreement 
  
 
process all such received policyholder requests to return to CITIZENS and forward such requests, along with the appropriate unearned premium attributable to
the Returned Policy, on a monthly basis to CITIZENS in an electronic format acceptable to CITIZENS. After the thirty-day period following an Assumption Date, but prior to the date on which they are renewed onto a Replacement Policy issued by the
Insurer, any assumed policyholder that elects to return to CITIZENS may cancel their Policy with the Insurer, and may make application to CITIZENS for a new Policy, and shall be accepted for coverage by CITIZENS if otherwise eligible. 
 G. Claims Servicing. 
 (i) CITIZENS
is solely responsible for the servicing of claims for losses occurring (a) prior to the Assumption Date under a Removed Policy, (b) at any time under a Rejected Policy, and (c) at any time under a Returned Policy. 
 (ii) Insurer is solely responsible for the servicing of claims for losses occurring on or after an Assumption Date under a Removed Policy. CITIZENS
shall have no responsibility for payment of losses or loss adjustment expenses or for the servicing of claims with respect to losses occurring under any Removed Policy on or after the Assumption Date. 
 (iii) CITIZENS agrees that in instances where the sharing of information will facilitate the resolution of a claim which has occurred after the
Assumption Date, and in accordance with applicable state and federal laws, it will share prior claims, underwriting and other information with the Insurer. CITIZENS reserves the right at any time to deny access to any and all such information or to
seek the permission of the Policyholder for release of such information. Insurer agrees to treat all information provided to them as confidential and certifies that all such information provided to them by CITIZENS shall be used strictly to adjust a
claim and for no other purpose. 
 (iv) With regard to losses occurring on Removed Policies after the Assumption Date, CITIZENS shall give
notice promptly to the Insurer of any claim by a third party or the commencement of any legal proceedings against CITIZENS with respect to such claim. The insurer shall have the exclusive right to control the contest and defense for any such claim
incurred or litigation Initiated as of the Assumption Date. The liability of the Insurer under the Removed Policies shall always follow that of CITIZENS, and any error or omission of CITIZENS or Its agents shall in no way relieve the Insurer of its
liability or obligations in respect of the matters affected by such errors or omissions, it being understood and agreed that the Insurer shall follow and share the same fortune as CITIZENS under all circumstances. 
 (v) CITIZENS agrees to assign to the Insurer any and all salvage and subrogation rights arising with respect to losses occurring on or after an
Assumption Date, which CITIZENS may have with respect to the Removed Policies. 
 H. Conditions to Closing. 
 The following conditions must be met prior to an Assumption Date: 
 (i) Approval by the Office of an Assumption by Issuance of a Consent Order or letter, which Consent Order or letter shall be attached hereto as Exhibit C. 
  

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 PLA Non-Bonus Assumption Agreement 
  
 (ii) Satisfactory compliance with all requirements of CITIZENS for participation in the Assumption. 
 (iii) The mailing, more than thirty days in advance of the Assumption Date, of the Initial Notice to each putative Policyholder of a Tagged Policy.

 I. Implementation. 
 (i) The parties hereto acknowledge that, pursuant to all applicable laws and this Agreement, CITIZENS will use its sole judgment and discretion in implementing the Assumption Procedures for participating Insurers. 
 (ii) Should the parties fail to agree on the Tagged Policies to be set forth on Exhibit A, no obligation shall be created pursuant to this Agreement.

 (iii) The Insurer and CITIZENS agree to allow the Insurer to supplement Exhibit A from time to time with lists of additional Tagged
Policies, but such additional Tagged Policies must be designated and assumed by the Insurer not later than eighteen (18) months from the initial Assumption Date. All Assumptions for each supplement to Exhibit A (e.g., Exhibit A-1, A-2,
etc.) shall be in accordance with the terms and provisions of this Agreement and the Assumption Procedures. The Policies so identified in any such supplement to Exhibit A shall be treated as Removed Policies as of the date of their Assumption for
the purposes of this Agreement. All such supplements to this Agreement shall be executed in writing by the Parties to effectuate and document such additional Assumptions. 
 (iv) CITIZENS shall not enter into an agreement with any other insurer for the removal of the Tagged Policies unless such policies are not removed by
the Insurer in accordance with the terms and provisions of this Agreement, or are Rejected Policies or Returned Policies or are written new by Citizens after their removal by Insurer. 
 4. Conditions of Assumption. 
 A. The Insurer shall remove the Removed Policies by Assumption in accordance with this Agreement and the Assumption Procedures and shall offer to renew the Insurer’s Replacement Policy for a period of three (3) years subsequent to
the expiration of the Removed Policy. During the aforenoted period, the Insurer’s renewals of the Replacement Policy shall be at the Insurer’s approved rates and on substantially similar terms or on such forms and rates as approved by the
Office. No such Policy may be cancelled or nonrenewed by the Insurer during this period except for nonpayment of premium or in accordance with the provisions of the Consent Order attached as Exhibit C. 
 B. CITIZENS shall provide, or has provided, to the Insurer, by electronic data transfer, or by such other means as is acceptable to CITIZENS, relevant
information regarding the Tagged Policies available for assumption. The Insurer understands that CITIZENS cannot guarantee the reliability and accuracy of this data and the Insurer agrees that policies will not be cancelled upon discovery that this
information was not accurate, unless such inaccuracy amounts to a material misrepresentation or fraud on behalf of the insured. 
  

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 PLA Non-Bonus Assumption Agreement 
  
 C. The Insurer understands that CITIZENS makes no guarantee that a Tagged Policy will be available for removal on the
Assumption Date. 
 D. Thirty-six (36) months after the first Assumption Date, the Insurer shall provide to CITIZENS an Independent
Auditor’s report performed in accordance with the instructions provided in the Audit Scope attached hereto and incorporated herein by reference as Exhibit E. At a minimum the Audit shall contain all pertinent data to verify the satisfactory
completion of the Insurer’s performance pursuant to this agreement. Prior to commencing work, the Independent Auditor shall be approved by CITIZENS, which approval shall not be unreasonably withheld. All expenses of the Independent Auditor
shall be paid by the Insurer. At the beginning of the Audit CITIZENS shall provide the approved auditor the procedures to be followed in meeting the requirements of Exhibit E. 
 E. The Insurer agrees that no bonus, Incentive plan, or consideration beyond the assumed premium will be paid by CITIZENS for the Insurer’s removal
of Removed Policies. 
 F. By signing this Agreement, Insurer certifies that its assumption of policies complies with Section 627.3517,
Florida Statutes. It is the Insurer’s sole responsibility to contact all agents involved with the Tagged Policies in order to obtain their permission to include those particular policies in the Assumption. 
 5. Office Oversight. CITIZENS shall provide a fully executed copy of this Agreement to the Office. The Insurer shall respond
to any requests for information by the Office regarding the proposal or this Agreement. The Insurer and CITIZENS are, and shall remain, subject to all applicable laws of the State of Florida and the supervision, rules, regulations and orders of the
Office. 
 6. Right of Audit. CITIZENS or its representatives, upon reasonable advance written notice, shall be entitled to
audit, at its own cost and expense, the relevant books and records of the Insurer during normal business hours to confirm the Insurer’s compliance with the terms and conditions of this Agreement. 
 7. Indemnification. Insurer shall indemnify CITIZENS, its Board of Governors, officers, agents and employees (“CITIZENS
Indemnitess”) against any costs, expenses (including reasonable counsel fees and costs of litigation), claims, demands, actions, losses or liabilities that CITIZENS Indemnitees may suffer or that may be asserted or claimed against CITIZENS
Indemnitees, caused by or arising directly out of any breach of this Agreement by the Insurer or Insurer’s Assumption of Removed Policies. 
 8. Insurer’s Continuing Status. The Insurer, during the period of this Agreement, shall remain duly licensed and authorized to transact property and casualty
insurance business in the State of Florida and the lines of insurance applicable to Removed Policies and Replacement Policies. 
 9.
Breach. Default Cure, Termination and Other Remedies. 
 A. Events of Default. A default under this Agreement occurs in
the event of any material breach of an obligation, representation or undertaking of a party as set forth in this Agreement, including without limitation: 
 (i)    (a) Insurer fails to maintain its authority and licensing to conduct its business as provided in Section 8 of this Agreement; or 
  

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 PLA Non-Bonus Assumption Agreement 
  
 (b) Insurer becomes subject to an adverse finding or an order of supervision, rehabilitation, or liquidation pursuant to
Chapter 631, Florida Statutes; or 
 (c) The issuance of any other order of the Office or a court of competent jurisdiction that in any
material form or manner limits or constrains the ability of the Insurer to engage In the business of property and casualty insurance, which results in the Insurer canceling or nonrenewing Removed Policies or Replaced Policies, other than the initial
Consent Order issued by the Office in connection with this Agreement 
 (d) No notice or curative period is required for a material breach
occurring pursuant to this Section (i). 
 (ii) Insurer’s assumption of Tagged Policies, Replacement Policies, or Removed Policies at
unapproved rates within one year of the Assumption Date. 
 (iii) The Insurer’s cancellation or non-renewal of a Removed Policy for an
invalid reason. For purposes of this paragraph, an “invalid reason” shall be a cancellation of non-renewal not authorized by the terms of this Agreement or by the Consent Order attached as Exhibit C. 
 (iv) The insurer fails to materially comply with Section 627.3517, Florida Statutes. In addition to any other remedies provided in this Agreement,
if Section 627.3516 is violated. Insurer will be liable for any costs associated with CITIZENS re-assuming any Removed Policies, if Citizens in its sole discretion determines to do so. In addition, Insurer will be assessed a monetary penalty in
the amount of $1000.00 per Policy for every Policy assumed without the permission of the agent, if Insurer fails to cure under the provision of Paragraph 9.B. 
 B. Cure. In the event of a default that may be cured, the non-defaulting party shall give the defaulting party written notice of the material breach or default. Failure of the defaulting party to cure the
material breach or default within fifteen (15) days of the receipt of the written notice as herein provided shall constitute and be deemed a material breach and default of this Agreement unless the material breach or default is not capable of
being cured within such period of time, and the defaulting party has commenced good faith efforts to cure such material breach or default within fifteen (15) days, and thereafter continues in good faith to diligently pursue curing until the
material breach or default is cured to the reasonable satisfaction of the non-breaching party. 
 C. Termination and Other Remedies.
Should the Insurer materially breach or default in any obligation as set forth in this Agreement and not timely cure such material default and breach as set forth in this section, CITIZENS may in its sole discretion, take any or all of the follow
actions: 
 (i) Terminate this Agreement or declare this Agreement canceled or void. 
 (ii) Prohibit Insurer from further assumption of policies pursuant to this Agreement or any future agreement. 
  

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 PLA Non-Bonus Assumption Agreement 
  
 (iii) Notify the Office of the violation of the Agreement and request that the Office take appropriate administrative
action. 
 (iv) Forfeiture of up to the entire amount of any escrowed bonus instituted pursuant to Paragraph 4.E., which shall be set forth
in detail in any addendum negotiated pursuant to Paragraph 4.E. 
 (v) In addition to any rights and remedies set forth in this Agreement,
the non-defaulting party shall have all rights and remedies available at law and/or equity, including, but not being limited to, the right to specific performance, damages or injunctive relief. 
 D. Removed Policies. Notwithstanding any breach of this Agreement, the Insurer shall remain responsible for Removed Policies unless and
until a judicial determination is rendered relieving, altering or limiting Insurer’s responsibility. 
 10. Attorney’s
Fees. If either of the parties hereto shall bring a Court action alleging material breach of this Agreement or seeking to enforce, rescind, renounce, declare void or terminate this Agreement or any provisions thereof, the prevailing party
shall be entitled to recover all of its legal expenses, including reasonable attorney’s fees and costs (including attorney’s fees and costs for any appeals taken), and to have the same awarded as part of the judgment in the proceeding in
which such legal expenses and attorney’s fees and costs were incurred. 
 11. Benefits. This Agreement shall be binding
upon the parties, their heirs, legal representatives, successors and assigns. 
 12. Captions. The paragraph captions as to
contents of the particular paragraphs herein are inserted only for convenience and are in no way to be construed as part of this Agreement or as a limitation of the scope of the particular paragraph in which they are referred. 
 13. Construction of Agreement. Words of a gender used in this Agreement shall be held to include any other gender, and words in a singular
number shall be held to include the plural, when the sentence so requires. 
 14. Entire Agreement. This Agreement contains all
of the oral and/or previously written agreements, representations, and arrangements between the parties hereto concerning the Program, and all rights which the respective parties may have had under any prior written or oral agreements are hereby
canceled and terminated, and all parties agree that there are no representations or warranties other than those set forth herein. 
 15.
Florida Law and jurisdiction. It is acknowledged that this Agreement was executed in and shall be construed and governed in accordance with the laws of the State of Florida and the rules, orders and regulations of the Office in effect
at the time of the execution of this Agreement. In the event of any conflict between such laws, rules, orders and regulations and Subsection 627.351(6), the provisions of that Subsection govern, if any legal action is filed pursuant to this
agreement such action must be filed in a court of competent jurisdiction in Leon County Florida. 
 16. Assignment. The Insurer
may not assign or transfer this Agreement, or any benefit or right under this Agreement without Citizens’ prior written consent. Any change in control or ownership is deemed a transfer of this Agreement requiring Citizens’ written consent.

  

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 PLA Non-Bonus Assumption Agreement 
  
 17. Invalidation. In the event any provision of this Agreement is determined to be invalid by a court of
competent jurisdiction, the remaining provisions of this Agreement remain in full force and effect. 
 18. No Intermediary. The
Insurer represents and warrants that it has not, and CITIZENS represents and warrants that it has not, incurred an obligation to make payment of any fees to any intermediary with respect to the obligations afforded under this Agreement. 

19. Modification. No change or modification of this Agreement shall be valid unless the same shall be in writing and signed by all of
the parties hereto and not disapproved by the Office. 
 20. Notices. Any and all notices, designations, consents, offers,
acceptances, or any other communications provided for herein shall be given in writing, by hand delivery, by overnight mail, by registered or certified mail, or by facsimile transmission and shall be addressed as follows: 
 Notice to Insurer: 
 Frank McCahill

 President & CEO 
 Homeowners Choice Property and Casualty Insurance Company 
 145 NW Central Park Plaza Suite 110 
 Port St. Lucie, FL 34986 
 (772) 336-9091 
 Notice to CITIZENS: 
 Mr. Scott Wallace 
 President Executive Director 
 CITIZENS Property Insurance Corporation 
 101 North Monroe Street, Suite 1000 
 Tallahassee, Florida 32301 
 (850)513-3780 
 Notices sent by hand
delivery shall be deemed delivered on the date of hand delivery. Notices sent by overnight Insurer shall be deemed delivered on the next business day after being placed into the hands of the overnight Insurer. Notices sent by registered or certified
mail shall be deemed delivered on the third business day after being deposited into the post office. Notices sent by facsimile transmission shall be deemed to be delivered on the day when sent if sent prior to 4:30 p.m. (the time being determined by
the time zone of the recipient) otherwise they shall be deemed delivered on the next business day. 
 21. Parties Represented.
The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any amendments or exhibits hereto. 
 22. Survival of Terms. Sections 3, 4, 5, 6, 7, 10,
15, 16,17, and 20 shall survive the termination of this Agreement. 
  

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 PLA Non-Bonus Assumption Agreement 
  
 IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above set forth.

  

			
	CITIZENS PROPERTY INSURANCE CORPORATION
		
	BY:	 	 



		 	Mr. Scott Wallace
		 	President and Executive Director
	
	INSURER
		
	BY:	 	 



		 	Mr. Frank McCahill
		 	President & CEO


  

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 PLA Non-Bonus Assumption Agreement 
  
 Exhibits: 
 A.
Schedule of Policies 
 B. Ceding Commission Rate 
 C. Consent Order 
 D. Timeline and Requirements for Assumption 
 E. Audit Scope 
 F. Initial Notice 

 

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 PLA Non-Bonus Assumption Agreement 
  
 EXHIBIT B 
 Ceding Commission Rate 
 The contract period to remove policies from CITIZENS will be eighteen (18) months. Any single
assumption in a take-out contract period must remove a minimum of 2,500 policies or a Total Insured Value (coverages A, B, C & D combined) of five hundred (500) million dollars. High Risk Account (HRA) and Personal Lines Account (PLA)
take-outs are exclusive and may not be assumed simultaneously under a single eighteen (18) month take-out contract. 
 There are additional Incentives
for assuming Insurers that remove larger numbers of eligible policies or TIV from the Personal Lines Account or High Risk Account. CITIZENS agrees to reduce the ceding commission for all policies in a take-out if either the minimum number of
policies or TIV are assumed. No agreement may be modified mid-term to change to a different bonus program, unless specified in the assumption agreement. 
 Ceding Commission (PLA) 
  

							
	 Number of Policies
	  	 Minimum Eligible
 Total Insured Value (TIV)
	  	 Ceding Commission
	  	 
	Less than 60,000	  	N/A	  	16%	  
	60,000 to 74,999	  	$11 Billion	  	Reduced to 12%	  
	75,000 to 89,999	  	$14 Billion	  	Reduced to 9%	  
	90,000 and up	  	$17 Billion	  	Reduced to 6%	  

 Ceding Commission (HRA) 
  

							
	 Number of Policies
	  	 Minimum Eligible
 Total Insured Value (TIV)
	  	 Ceding Commission
	  	 
	Less than 35,000	  	N/A	  	16%	  
	35,000 to 49,999	  	$10 Billion	  	Reduced to 12%	  
	50,000 to 79,999	  	$14 Billion	  	Reduced to 9%	  
	80,000 and up	  	$22 Billion	  	Reduced to 6%	  

  

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 PLA Non-Bonus Assumption Agreement 
  
 Ceding Commission (Mobile Home) 
  

							
	 Number of Policies
	  	 Minimum Eligible
 Total Insured Value (TIV)
	  	 Ceding Commission
	  	 
	Less than 15,000	  	N/A	  	16%	  
	15,000 to 19,999	  	N/A	  	Reduced to 12%	  
	20,000 to 29,999	  	N/A	  	Reduced to 9%	  
	30,000 and up	  	N/A	  	Reduced to 6%	  

  

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 PLA Non-Bonus Assumption Agreement 
 EXHIBIT C 
 Consent Order 
 

 
 OFFICE OF INSURANCE REGULATION 
  

			
		  	FILED
		  	01435
		  	JUN 1 2007

 KEVIN MCCARTY 
 COMMISSIONER 
 Documented by: DOM 
  

			
	 IN THE MATTER OF:
	  	CASE NO.: 90450-07-CO

 HOMEOWNERS CHOICE 
 PROPERTY & CASUALTY INSURANCE COMPANY 
 ______________________________________________/ 
 CONSENT ORDER 
 THIS CAUSE came
on for consideration as a result of HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY’S (hereinafter “HOMEOWNERS CHOICE”) proposal to remove selected policies from CITIZENS PROPERTY INSURANCE CORPORATION (hereinafter
“CITIZENS”), which was submitted to the OFFICE OF INSURANCE REGULATION (hereinafter “OFFICE”) for its review on May 18, 2007. After a complete review of the entire record and upon consideration thereof, and otherwise being
fully advised in the premises, the OFFICE hereby finds as follows: 
 1. The OFFICE has jurisdiction over the subject matter and of the
parties herein. 
 2. CITIZENS was created by statute as a mechanism for for equitable apportionment or sharing among insurers of property
and casualty insurance covering residential property, for applicants who are in good faith entitled, but are unable, to procure insurance through the admitted voluntary market. 
 3. The Legislature of the State of Florida has enacted Section 627.3511, Florida Statutes, to encourage and provide a means for the depopulation of
CITIZENS. 







 4. HOMEOWNERS CHOICE is a Florida domiciled property and casualty insurance company authorized to
transact insurance in the State of Florida. 
 5. On or about May 18, 2007, HOMEOWNERS CHOICE submitted a proposal to remove selected
policies from CITIZENS. The plan provides for an assumption of up to twenty thousand (20,000) policies from CITIZENS. HOMEOWNERS CHOICE plans to assume the CITIZENS’ policies over a period of time, subject to the approval by the OFFICE.

 6. HOMEOWNERS CHOICE understands that the selected policies to be removed from CITIZENS on or about July 19, 2007, will not be
subject to any incentive or bonus plan pursuant to Section 627.3511, Florida Statutes, unless and until the OFFICE approves such a plan for use by CITIZENS during the 2007 calendar year. If the OFFICE approves a bonus plan for use by other
take-out companies or for other transactions during the 2007 policy year, the bonus may be paid to HOMEOWNERS CHOICE is accordance with that plan and agreements between HOMEOWNERS CHOICE and CITIZENS. HOMEOWNERS CHOICE shall enter into appropriate
agreements with CITIZENS to provide the following: 
 (a) HOMEOWNERS CHOICE, at its own expense, will give at least thirty
(30) days advance notice to affected policyholders, which notice will inform policyholders of the need to contact HOMEOWNERS CHOICE before the removal date if the policyholder desires to stay with CITIZENS. 
 (b) HOMEOWNERS CHOICE will accumulate any objections, and will facilitate the return of any policyholder who desires to stay in CITIZENS
if that policyholder expresses the desire to stay in CITIZENS within the thirty (30) day notice period prior to the removal of the policy, or within thirty (30) days after the date of the policy removal. Policyholders will not be required
to make additional payments, nor take any action other than to express the desire to remain with CITIZENS in writing, by e-mail, or by telephone on or before thirty (30) days following the date of their policy removal. 
  

 2 








 7. HOMEOWNERS CHOICE agrees that any rate charged
to policyholders within one (1) year of the actual date of removal of policies removed pursuant to this Consent Order shall remain at or below the approved rate for CITIZENS. HOMEOWNERS CHOICE agrees that it win make an appropriate filing to
reduce its rates to keep its rates below those offered by CITIZENS for the first (1st) year after removal of the policies if CITIZENS reduces
its rate during the same one (1) year period. 
 8. HOMEOWNERS CHOICE acknowledges that neither approval by CITIZENS nor entry into this
Consent Order by the OFFICE constitutes a guarantee that the above referenced policies will ultimately be available to HOMEOWNERS CHOICE for removal from CITIZENS, as the availability of policies for removal may vary over time. 
 9. HOMEOWNERS CHOICE shall limit its actual removal of policies from CITIZENS to the number and type of policies authorized by the OFFICE. The OFFICE
will base its review on HOMEOWNERS CHOICE’s reinsurance program, catastrophe modeling, and financial statement projections as well as the impact on policyholders. Such reinsurance program, catastrophe modeling, and financial statement profiles
shall be based upon HOMEOWNERS CHOICE’s current in-force book of residential property policies, HOMEOWNERS CHOICE’s projected voluntary market writings, and actual number of policies available in CITIZENS prior to the anticipated
assumption date identified by HOMEOWNERS CHOICE as satisfying its filed and approved underwriting guidelines. 
 10. HOMEOWNERS CHOICE has
submitted the proposed reinsurance documentation and financial projections for assumption of up to seven thousand, six hundred 
  

 3 








 
forty-three (7,643) polices, expected to be assumed on July 19, 2007. Each additional assumption of CITIZENS policies by HOMEOWNERS CHOICE shall be
subject to advance written approval by the OFFICE. 
 11. HOMEOWNERS CHOICE’s acquisition of adequate reinsurance and maintenance of
executed reinsurance agreements is material to the OFFICE’S review and analysis of HOMEOWNERS CHOICE’s proposal to remove selected policies from CITIZENS and to the OFFICE’S approval of said proposal. 
 12. HOMEOWNERS CHOICE expressly waives its rights to any hearing in this matter, the making of findings of fact and conclusions of law by the OFFICE, and
all other and further proceedings herein to which the parties may be entitled by law or by rules of the OFFICE. HOMEOWNERS CHOICE agrees not to appeal or otherwise contest this Consent Order in any forum now or in the future, available to it.

 13. HOMEOWNERS CHOICE represents all explanations and documents made or submitted to the OFFICE as part of its proposal to remove selected
policies from CITIZENS, including all attachments and supplements thereto, fully describe all transactions, agreements, and understandings relating to the removal of policies from CITIZENS by HOMEOWNERS CHOICE. However, all draft documents and
non-executed agreements relating to HOMEOWNERS CHOICE’s plan shall not be deemed approved by this Consent Order until such time as executed agreements or final documents are submitted and approved by the OFFICE. 
 14. The parties agree this Consent Order will be deemed executed when the agency head or his designee has signed a copy of this Consent Order bearing
signature of HOMEOWNERS CHOICE, or its authorized representative, notwithstanding the fact the copy 

  

 4 








 
was transmitted to the OFFICE electronically or via facsimile machine. HOMEOWNERS CHOICE agrees the signature of its representative as affixed to this
Consent Order shall be under seal of a Notary Public. 
 15. Each party to this action shall bear its own costs and attorney fees.

 IT IS THEREFORE AGREED that: 
 (a) Upon consideration of the proposal to remove selected policies from CITIZENS, including its attachments, the OFFICE approves the proposal to remove selected policies from CITIZENS, subject to adherence to the
terms and conditions of this Consent Order by HOMEOWNERS CHOICE; 
 (b) The OFFICE approves the assumption of up to twenty
thousand (20,000) policies, with the removal of no more than seven thousand, six hundred forty-three (7,643) policies for the initial assumption starting on or about July 19, 2007, in accordance with the proposal to remove selected
policies from CITIZENS, any agreement(s) between HOMEOWNERS CHOICE and CITIZENS, and this Consent Order; 
 (c) Prior to
July 1, 2007, HOMEOWNERS CHOICE shall provide written documentation satisfactory to the OFFICE, including signed reinsurance confirmation slips, as evidence HOMEOWNERS CHOICE has obtained sufficient reinsurance to sustain a probable maximum
loss from a one hundred (100) year storm and multiple storms in the same season as determined by catastrophe loss models acceptable to the OFFICE for such purposes; 
 (d) Prior to the OFFICE’s approval of future assumptions, HOMEOWNERS CHOICE will be required to provide an updated financial plan
demonstrating a Risk-Based Capital above two hundred percent (200%); 
  

 5 








 (e) Regarding all reinsurance matters relating to policies removed from CITIZENS, for a
period of three (3) years immediately following the date of entry of this Consent Order, HOMEOWNERS CHOICE shall: 
 (i)
Maintain substantially the same reinsurance coverage as evidenced to the OFFICE in the proposal to remove selected policies from CITIZENS; 
 (ii) Submit to the OFFICE any and all replacement or additional reinsurance agreement(s), or amendment(s) to reinsurance agreement(s). Said agreement(s) and amendment(s) shall be submitted to the OFFICE for review,
and approval, sixty (60) days prior to the date of effectnation of any such agreement(s) or amendment(s); 
 (iii) Notify
the OFFICE of any termination of any of its reinsurance agreements. Said notification shall be made to the OFFICE in writing sixty (60) days prior to the effective date of any such termination; 
 (iv) Submit in writing to the OFFICE the proposed utilization of any substitute or additional reinsurers for the OFFICE’S review, and
approval, sixty (60) days prior to the companies being utilized within HOMEOWNERS CHOICE’s reinsurance program. HOMEOWNERS CHOICE shall further immediately submit to the OFFICE all information as requested which the OFFICE deems necessary
for the OFFICE to complete its review; and 
 (v) Cede reinsurance or otherwise contract for reinsurance only with reinsurers
who are authorized and/or approved by the OFFICE or such other reinsurers as may be approved in advance and in writing by the OFFICE. HOMEOWNERS CHOICE shall comply with the requirements of Section 624.610, Florida Statutes, with regard to all
of its reinsurance arrangements; 
  

 6 








 (f) For the three (3) years immediately following the date of entry of this Consent
Order, HOMEOWNERS CHOICE shall file with the OFFICE, on an annual basis no later than June 1 of each year, a catastrophe loss model with probable maximum loss estimate amounts from a one hundred (100) year storm based upon the exposure
information gathered from all of its policies in force as of April 15 of each year which would be affected by a catastrophe. HOMEOWNERS CHOICE shall include in this filing an exposure management plan, which will identify the company’s ability
to provide satisfactory financial capacity to cover the company’s exposure to catastrophic hurricane loss. The plan shall identify the reinsurance coverage and surplus levels being utilized to maintain a satisfactory financial capacity with
regard to catastrophe exposure. HOMEOWNERS CHOICE shall also include within the plan specific actions intended to limit catastrophic exposures to the company’s financial capacity. Based upon the OFFICE’S review of said models and plans,
HOMEOWNERS CHOICE may be required at the OFFICE’S sole discretion to take corrective action to cure any overexposure identified by the OFFICE. Such action may also include obtaining additional amounts of reinsurance coverage as directed by the
OFFICE or suspend writing of any additional business, including CITIZENS policies; 
 (g) Any and all policies removed from
CITIZENS by HOMEOWNERS CHOICE shall provide coverage substantially equivalent to that afforded by CITIZENS. Any and all policies removed from CITIZENS by HOMEOWNERS CHOICE pursuant to its proposal to remove selected policies from CITIZENS, must be
renewable by the policyholder at approved rates and upon the same terms for a period of three (3) consecutive years, unless such policies are canceled by HOMEOWNERS CHOICE for a lawful reason other than reduction of hurricane exposure;

  

 7 








 (h) At the time HOMEOWNERS CHOICE removes any policy of insurance from CITIZENS,
HOMEOWNERS CHOICE shall either obtain a new policy application from each affected policyholder or maintain in its files a copy of the policyholder’s application on file with CITIZENS. If HOMEOWNERS CHOICE chooses the latter option, HOMEOWNERS
CHOICE shall nevertheless be required to obtain a new policy application from each affected policyholder no later than twenty-four (24) months from the effective date of any policy of insurance removed from CITIZENS. HOMEOWNERS CHOICE may not
initiate any retrospective increase in rate or premium or any retrospective decrease in coverage provided under the assumed CITIZENS policy (if applicable) as a result of the information obtained from or through the new policy applications;

 (i) For a period of three (3) years immediately following the date of entry of this Consent Order, HOMEOWNERS CHOICE
shall abide by the Transition Plan and proposal to remove selected policies from CITIZENS in all material respects. Further, HOMEOWNERS CHOICE shall abide by all terms and provisions of any agreement(s) entered into with CITIZENS; and; 

(j) Should the OFFICE determine HOMEOWNERS CHOICE has materially failed to comply with terms of this Consent Order, the proposal to
remove selected policies from CITIZENS, including its attachments, the Transition Plan and amendments thereto as submitted to the OFFICE, or terms of any agreement(s) with CITIZENS, HOMEOWNERS CHOICE shall, upon receipt of notice of such material
non-compliance, have sixty (60) days to cure its material non-compliance. In the event HOMEOWNERS CHOICE fails to cure any such material non-compliance within the sixty (60) day period, HOMEOWNERS CHOICE expressly agrees the OFFICE may
enter an order directing it to immediately cease writing personal lines residential property coverage or other lines of insurance within the State of Florida, or imposing such other sanctions authorized by statute or rule or restrictions as may be
deemed appropriate by the OFFICE. 
  

 8 








 THEREFORE, the proposal to remove up to twenty thousand (20,000) policies from CITIZENS by
HOMEOWNERS CHOICE, with the removal of no more than seven thousand, six hundred forty-three (7,643) policies for the initial assumption starting on July 19, 2007, subject to the terms and conditions of this Consent Order, are hereby
APPROVED. 
 FURTHER, all terms and conditions contained herein are hereby ORDERED. 
 DONE and ORDERED this 1st day of JUNE, 2007. 
  

					
			
	

	 		 	/s/ Kevin M. McCarty
	 	 	 Kevin M. McCarty
 Commissioner
 Office of Insurance Regulation

	 	 
	 	 

  

 9 








 By execution hereof, HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY., consents to entry of this Consent
Order, agrees without reservation to all of the above terms and conditions and shall be bound by all provisions herein. The undersigned represents that he/she has the authority to bind HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY
to the terms and conditions of this Consent Order. 
 HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY 
  

							
				
		 		 	By:	 	/s/ Francis X. McCahill, III
	Corporate Seal	 		 	Print name:	 	Francis X. McCahill, III
		 		 	Title:	 	President
		 		 	Date:	 	June 1, 2007

 STATE OF Florida 
 COUNTY OF St. Lucie 
 The foregoing instrument was acknowledged before me this 1 day of June 2007, 

									
	by	 	Francis X. McCahill, III	 		 	as	 	President
		 	(name of person)	 		 		 	(type of authority ...e.g. officer, trustee attorney in fact)
	for	 	Homeowners Choice Property & Casualty Ins.	 		 		 	
		 	(company name)	 		 		 	

  

	
	
	/s/ Edward Horton
	(Signature of the Notary)
	
	Edward Horton
	(Print, Type or Stamp Commissioned Name of Notary)


 Personally Known ___________ OR Produced Identification ü 
 Type of Identification Produced FLDL 
  

					
	 My Commission Expires:
	  	

	  	[NOTARIAL SEAL]

  

 10 








 COPIES FURNISHED TO: 
 Lee
Stuart 
 Citizens Property Insurance Corporation 
 Corporate
Offices 
 101 North Monroe Street, Suite 1000 
 Tallahassee, FL
32301 
 Francis X. McCahill, President 
 Homeowners Choice
Property Insurance Company 
 145 N. W. Central Park Plaza, Suite 110 
 Port St. Lucie, Florida 34986 
 Claude Mueller, Director 
 Property & Casualty Financial Oversight 
 Office of Insurance Regulation 
 200 East Gaines Street 
 Tallahassee, FL 32399-0329 
 Amanda Pamell, Assistant General Counsel 
 Office of Insurance Regulation 
 Legal Services Office 
 612 Larson Building 
 200 East Gaines Street 
 Tallahassee, FL 32399-0333 
  

 11 








 

 
 OFFICE OF INSURANCE REGULATION 
 KEVIN MCCARTY 
 COMMISSIONER 
  

			
	IN THE MATTER OF:	  	CASE NO.: 93346-07-CO

 HOMEOWNERS CHOICE PROPERTY 
 & CASUALTY INSURANCE COMPANY 
 __________________________________/ 
 AMENDED CONSENT ORDER 
 THIS CAUSE came upon consideration as a result of the proposal by HOMEOWNERS
CHOICE PROPERTY & CASUALTY INSURANCE COMPANY (hereinafter referred to as “HOMEOWNERS CHOICE”) to remove selected policies from CITIZENS PROPERTY INSURANCE COPORATION (hereinafter referred to as “CITIZENS”), which was
submitted to the OFFICE OF INSURANCE REGULATION (hereinafter referred to as the “OFFICE”) for its review on December 3, 2007. After a complete review of the entire record and upon consideration thereof and otherwise being fully
advised in the premises, the OFFICE hereby finds as follows: 
 1. The OFFICE has jurisdiction over the subject matter and the parties
herein. 
 2. On June 1, 2007, the OFFICE and HOMEOWNERS CHOICE entered into Consent Order No. 90450-07-CO (hereinafter referred to
as the “TAKEOUT ORDER”), which approved the proposal by HOMEOWNERS CHOICE’S to remove up to twenty thousand (20,000) policies from CITIZENS. HOMEOWNERS CHOICE is currently subject to all the terms and conditions of the Consent
Order. 









 3. HOMEOWNERS CHOICE filed a subsequent proposal on December 3, 2007 to remove an additional ten
thousand (10,000) policies from CITIZENS. 
 4. Upon consideration of the subsequent proposal to remove the additional ten thousand
(10,000) selected policies from CITIZENS, and reliance upon all representations made in the proposal, the OFFICE amends the TAKEOUT ORDER to approve the subsequent proposal by HOMEOWNERS CHOICE to remove the additional selected policies from
CITIZENS, subject to the terms and conditions of this Amended Consent Order. 
 5. The provision of paragraph (15)(b) in Consent Order
No. 90450-07-CO is revised to read as follows: “The OFFICE approves the assumption of up to twenty thousand (20,000) policies on or about July 19, 2007, an additional ten thousand (10,000) policies on or about
February 12, 2008, and on additional dates as approved by the OFFICE, in accordance with the proposal to remove selected policies from CITIZENS, any agreement(s) between HOMEOWNERS CHOICE and CITIZENS, and this Consent Order.” 

6. All other provisions of Consent Order No. 90450-07-CO remain unchanged by this Amended Consent Order and remain in full force and effect with
respect to all thirty thousand (30,000) policies approved for removal. 
 DONE
AND ORDERED this 19th day of December, 2007 
  

	
	
	/s/ Kevin M. McCarty
	 Kevin M. McCarty, Commissioner
 Office of Insurance
Regulation












 By execution hereof, HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY consents to entry of this Consent
Order, agrees without reservation to all of the above terms and conditions and shall be bound by all provisions therein. The undersigned represents that he has the authority to bind HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY to
the terms and conditions of this Consent Order. 
  

	
	HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY
	
	


	Francis X. McCahill, President


 Corporate Seal 
 STATE OF FL 
 COUNTY OF ST Lucie 
 The foregoing
instrument was acknowledged before me this 17 day of Dec. 2007, 
  

									
					
	by	 	Francis McCahill	 		 	as	 	Officer
		 	(name of person)	 		 		 	(type of authority...e.g. officer, trustee attorney in fact)
					
	for	 	Homeowners Choice P&C Ins. Co.	 		 		 	
		 	(company name)	 		 		 	

  

	
	
	


	(Signature of the Notary)


 

 
 Personally Known þ OR Produced Identification ______________ 
 Type of Identification Produced ____________________ 









 COPIES FURNISHED TO: 
 Lee
Stuart 
 Citizens Property Insurance Corporation 
 Corporate
Offices 
 101 North Monroe Street, Suite 1000 
 Tallahassee, FL
32301 
 Francis X. McCahill, President 
 Homeowners Choice
Property & Casualty Insurance Company 
 145 N. W. Central Park Plaza, Suite 110 
 Port St. Lucie, Florida 34986 
 Travis L. Miller 
 Radey, Thomas, Yon & Clark, P.A. 
 301 S. Bronough Street, Suite 200 
 Tallahassee, FL 32301 
 E-Mail: tmiller@radeylaw.com 
 Robin Westcott, Director 
 P&C Financial Oversight 
 200 East Gaines Street 
 Tallahassee, FL 32399-0329 
 Diane Zecchino-Lukin, Assistant General Counsel 
 Office of Insurance
Regulation 
 Legal Services Office 
 612 Larson Building

 200 East Gaines Street 
 Tallahassee, FL 32399-0333 

Zecchino-lukind@fldfs.com 









 PLA Non-Bonus Assumption Agreement 
  
 EXHIBIT D 
 Timeline and Requirements for Assumption 
  

	•	 	 At any point in time, an Insurer may request, for purposes of depopulation and subject to an appropriate confidentiality agreement, a data file of policies from
CITIZENS. All policies not currently pending cancellation, not set for non-renewal or tagged for another insurer as described below, will be included in the data file. 


  

	•	 	 Companies may not be allowed to Depopulate polices in consecutive assumptions. This is dependent upon the number of participants. This determination is based on
resources, and solely at the discretion of the Depopulation Manager. 


 At least 45 Days Before Initial Assumption 

  

	•	 	 The Insurer must provide a Certificate of Authority from the Office, and an Order or letter from the Office approving the assumption. 



 

	•	 	 The Assuming Carrier must return an executed Requirements and Deadline Letter. 


  

	•	 	 The Insurer must return an executed Requirements and Deadline Letter  


 At Least 40 Days Before Initial Assumption 
  

	•	 	 The Assuming Carrier’s policy selection must be submitted to Citizens. By submitting this policy selection file the assuming carrier is certifying that all
associated have either been appointed by the company or agreed to have their policies assumed by the company under the provisions of “Consumer Choice.” 


  

	•	 	 Citizens must receive the Assuming Carrier’s information (company letterhead with logo, signature, etc.) to begin formatting of assumption notices.



 At Least 35 Days Before Initial Assumption 
  

	•	 	 The Assuming Carrier must mail notice 35 days before the assumption date giving the consumer the option to choose not to be assumed. The Notice must be approved by
the O.I.R. and Citizens. It must be sent to each consumer the carrier intends to assume. The Insurer must return an executed Assumption Agreement to CITIZENS. 


  

	 	•	 	 It is the Assuming Carrier’s responsibility to collect the responses from the above notice, and retain these for documentation. All consumers who indicate they
do not want to be assumed need to be entered into an Access data base with their associated Citizens policy number. 


 At Least 6
Days Before Initial Assumption 
  

	 	•	 	 The Assuming Carrier must provide a data file (Access format) containing each consumer and associated policy number that has chosen to not be assumed. Citizens
eliminates the policies of consumers who do not wish to have their policies assumed from the company’s policy selection. 











 PLA Non-Bonus Assumption Agreement 
  

	 	•	 	 These deadlines may change depending upon the number of participating companies. The Depopulation manager will notify if modification is necessary.



 EXHIBIT E 
 Audit Scope 
 This Audit Scope provides the directions for the audit which will occur 36 months after the last assumption date. By signing
the overall assumption agreement the Insurer has agreed to abide by the terms of this document. 
 1. Approximately sixty (60) days prior to the end of
the 36-month period following the date that the Insurer last removed policies under the Non-Bonus Takeout Program, the Insurer will provide to CITIZENS a computer file (hereinafter referred to as the “Policy Computer File”) in ACCESS
format sorted by CITIZENS policy number, which contains the following information on each policy: 
  

	 	a.	Complete CITIZENS policy number; 

  

	 	b.	Year and month in which policy was removed from CITIZENS; 

  

	 	c.	Insurer’s policy number; 

  

	 	d.	Policy effective date of the Insurer’s initial policy; 

  

	 	e.	Policy expiration date of the Insurer’s Initial policy; 

  

	 	f.	County of property location; 

  

	 	g.	Property address; and 

  

	 	h.	Indicate if the policy is in-force, or canceled. 

  

	 	i.	For all cancelled policies, the effective date of the cancellation. 

 2.
CITIZENS will select a random sample of 400 policies, hereinafter referred to as the “Sample Policies”, from the Policy Computer File and provide a list of the selected policies to the Insurer. 
 3. The Insurer will select an Independent Auditor subject to the concurrence of Citizens, which concurrence shall not be unreasonably withheld. The Insurer will provide
its Independent Auditor with the list of the Sample Policies. The Independent Auditor, at the expense of the Insurer, will conduct agreed-upon procedures pursuant to this Agreement, and will perform the following: 
  

	 	a.	For in force Sample Policies: 

  

	 	1.	Verify that there were offers of coverage and policyholder payments; and 

  

	 	2.	Verify that the effective date, county and property address are correct; and 

  

	 	3.	Verify that the policy was in-force with no lapse in coverage through the end of the initial 36-month period. 

  

	 	4.	Identify and explain any exceptions. 

  

	 	b.	For Sample Policies no longer in force: 

  

	 	1.	Verify that there were offers of coverage and policyholder payments; and 

  

	 	2.	Verify that the effective date, county, and property address are correct; and 

  

	 	3.	Identify and explain any exceptions; and 

  

	 	4.	 For Sample Policies no longer in force due to voluntary cancellation by the insured 












 PLA Non-Bonus Assumption Agreement 
  

	 	 
(including those cancelled for non-payment of premium), review the policy file for documentation or other data entry, e.g., diary comments, letters from
insured, etc., regarding the cancellation and document the reason(s) for cancellation and the effective date of the cancellation. 


  

	 	5.	For Sample Policies no longer in force due to cancellation by the Insurer for fraud, i.e., material misrepresentation, review the policy file for supporting documentation for the
cancellation and document the reason(s) for cancellation and the effective date of the cancellation. 

  

	 	6.	Identify any Sample Policies that were cancelled or non-renewed by the Insurer to reduce the Insurer’s hurricane exposure or for any other reason other than in 4 and 5, above,
and provide the effective date of the cancellation and reason for cancellation. 

 4. The Independent Auditor will provide an agreed-upon
procedures report (hereinafter referred to as “Report”) to the Insurer and CITIZENS detailing its findings on each policy reviewed. The Report will list CITIZENS and Its auditor, Ernst & Young, as users. 
 5. CITIZENS will review and verify the Report of the Independent Auditor. Within 10 working days of receipt of the Report, CITIZENS will verify whether the Report has
been prepared in compliance with the agreed-upon procedures set forth in this Agreement. If the Report is not verified, CITIZENS will advise the Independent Auditor on how to correct any deficiencies noted during the verification process and may
require that additional policies be sampled in order to validate the findings in the Report 
 6. After verification of the Independent Auditor’s Report
by Citizens, either the Insurer or CITIZENS may elect, at its own expense, to expand the review sample to enhance the accuracy of the data to be used in extrapolating findings to the entire population. This election may only be made once by each
party to this Agreement. The party making such election must notify the other party of its intent within 14 days after receipt of notice of verification of the Independent Auditor’s Report prepared pursuant to Paragraphs 4 and 5, above.

 7. The Report shall be referred to the Office. 









 PLA Non-Bonus Assumption Agreement 
  
 EXHIBIT F 
 Initial Notice 
 

 
  
  
 June 13, 2007 
  

			
	 Policy Holder
 Street
 City, State ZIP
	  	Insured Location:

 Dear Citizens Policyholder: 
 On June 1, 2007, the Florida Office of Insurance Regulation signed a consent order approving Homeowners Choice Property & Casualty Insurance Company’s (Homeowners Choice) assumption of insurance policies from Citizens
Property Insurance Corporation (Citizens). We are pleased to announce that your policy has been selected by Homeowners Choice. Your agent is aware of this and will continue to represent you. On the assumption date of your policy, Homeowners Choice
will become responsible for the payment of any claims that occur, under Citizens policy terms, after July 19, 2007. Approximately 45 days prior to when your current Citizens policy renews, you will be offered a policy by Homeowners Choice that
provides you with a rate that will be at or below what you are currently paying Citizens. Under the new law, you as an insurance consumer have a right to choose to reject this offer from Homeowners Choice and stay with Citizens. However, we
believe you should carefully consider the offer of Homeowners Choice. Here are some of the Important reasons why: 
  

	 	•	 	 Our rates are lower than what you are currently paying Citizens and you will benefit from this savings when your policy renews later this year.



  

	 	•	 	 Your current policy will be continued with no change in your coverage or disruption in your policy cycle. 


  

	 	•	 	 Homeowners Choice intends to provide you with superior customer service, efficient and fast policy service, and expedited claims handling.



  

	 	•	 	 Homeowners Choice will offer quarterly, semi-annual, and annual installment payment plans to assist you with budgeting your premiums. 



We look forward to providing you high levels of service as your insurance company. If you have any specific coverage and rate questions, please call your insurance
agent. For general questions about Homeowners Choice Property & Casualty Insurance Company, please call 1-866-561-3433, Monday through Friday, from 8 am to 5 pm eastern time, or you can visit our website at http://www.homeownerschoicefl.com to
learn more about our company and our commitment to you. 
 NO ACTION IS REQUIRED BY YOU TO PARTICIPATE. HOWEVER, TO PREVENT THE ASSUMPTION OF YOUR
POLICY BY HOMEOWNERS CHOICE, PLEASE DETACH THE FORM BELOW, SIGN AND MAIL TO HOMEOWNERS CHOICE ON OR BEFORE JULY 13, 2007. Thank you! 
  

	
	Sincerely,
	
	


	
	 F. X. McCahill III
 President


  

									
	  
	 	"	  	  
	 	"	  	  

		 	  		 	  	

 ******ONLY RETURN THIS FORM IF YOU ARE REJECTING THE OFFER ******** 
 Please clip above and mail to or fax to: 772-204-9399 
 Homeowners Choice Property & Casualty Insurance Company 
 145 NW Central Park Plaza, Suite 115 
 Port St. Lucie, FL 34986 
 I wish to stay with Citizens
and reject this offer. 
  

	
	Printed
Name:                                        
                                         
                                         
                                         
                                         
                         
	
	Signature:                                      
                                         
                                         
                                         
                                         
                                   
	
	Address/City/State/Zip:                                   
                                         
                                         
                                         
                                         
             
	
	Citizens Insurance Policy
Number:                                        
                               Daytime Phone Number:
(            )                            
                

 HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE CO., INC. 
 145 NW CENTRAL PARK PLAZA, SUITE 115  •  PORT ST. LUCIE, FL  •  34986 
 PHONE: 772-204-9394  •  FAX: 772-204-9399 









 

 
  
  
  

			
	October 10, 2007	  	
		
	Policy Holder	  	Insured Location:
	Street	  	
	City, State ZIP	  	

 Dear Citizens Policyholder: 
 On MM/DD/YYYY, the Florida Office of Insurance Regulation signed a consent order approving Homeowners Choice Property & Casualty Insurance Company’s (Homeowners Choice’s) assumption of insurance policies from Citizens Property
Insurance Corporation (Citizens). We are pleased to announce that your policy has been selected by Homeowners Choice. Your agent is aware of this and will continue to represent you. On the assumption date of your policy, Homeowners Choice will
become responsible for the payment of any claims that occur, under Citizens policy terms, after MM/DD/YYYY. Approximately 45 days prior to when your current Citizens policy renews, you will be offered a policy by Homeowners Choice that provides you
with a rate that will be at or below what you are currently paying Citizens. Under the new law, you as an insurance consumer have a right to choose to reject this offer from Homeowners Choice and stay with Citizens. However, we believe you
should carefully consider the offer of Homeowners Choice. Here are some of the important reasons why: 
  

	 	•	 	 Our rates are lower than what you are currently paying Citizens and you will benefit from this savings when your policy renews later this year.



  

	 	•	 	 Your current policy will be continued with no change in your coverage or disruption in your policy cycle. 


  

	 	•	 	 Homeowners Choice intends to provide you with superior customer service, efficient and fast policy service, and expedited claims handling.



  

	 	•	 	 Homeowners Choice will offer quarterly, semi-annual, and annual installment payment plans to assist you with budgeting your premiums. 



We look forward to providing you high levels of service as your insurance company. If you have any specific coverage and rate questions, please call your insurance
agent. For general questions about Homeowners Choice Property & Casualty Insurance Company, please call 1-877-304-9394, Monday through Friday, from 8:30 to 5 pm eastern time, or you can visit our website at http://www.hcpci.com to learn more
about our company and our commitment to you. 
 NO ACTION IS REQUIRED BY YOU TO PARTICIPATE. HOWEVER, TO PREVENT THE ASSUMPTION OF YOUR POLICY BY
HOMEOWNERS CHOICE, PLEASE DETACH THE FORM BELOW, SIGN AND MAIL TO HOMEOWNERS CHOICE BEFORE NOVEMBER 9, 2007. Thank you! 
  

	
	Sincerely,
	
	


	
	 F. X. McCahill III
 President


  

									
	  
	 	"	  	  
	 	"	  	  

		 	  		 	  	

 ******ONLY RETURN THIS FORM IF YOU ARE REJECTING THE OFFER******** 
 Please clip above and mail to or fax to: 772-204-9399 
 Homeowners Choice Property & Casualty Insurance Company 
 P.O. Box 880097 
 Port St. Lucie, FL 34988-0097 
 I wish to stay with
Citizens and reject this offer. 
  

	
	Printed
Name:                                        
                                         
                                         
                                         
                                         
                         
	
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	Citizens Insurance Policy
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 HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE CO., INC. 
 145 NW CENTRAL PARK PLAZA, SUITE 115  •  PORT ST. LUCIE, FL  •  34986 
 PHONE: 772-204-9394  •  FAX: 772-204-9399