Document:

EX-10.37

 AMENDMENT NO. 1 TO 
 SECURITIES PURCHASE AGREEMENT 
 This Amendment No. 1 to the Securities
Purchase Agreement (the “Amendment”) is made and entered into as of September 21, 2012 (the “Effective Date”), between Alimera Sciences, Inc., a Delaware corporation (the “Company”) and each
purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”, and collectively, the “Purchasers”). 

WHEREAS, the Company and the Purchasers previously entered into the Securities Purchase Agreement dated as of July 17, 2012 (the
“Agreement”); 
 WHEREAS, the Company and the Purchasers have deemed it advisable to enter into this Amendment
in order to amend the Agreement as set forth herein. 
 NOW, THEREFORE, the parties, intending to be legally bound, hereby amend
the Agreement as follows: 
 1. Amendment to WHEREAS clauses. The first WHEREAS clause of the Agreement is hereby amended
and restated in its entirety to read as follows: 
 “WHEREAS, subject to the terms and conditions set forth
in this Agreement and pursuant to an exemption from registration contained in the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement; and” 

2. Amendment to Article I of the Agreement. Article I of the Agreement is hereby amended as follows: 

a. The definition of “Closing Date” contained in Section 1.1 of the Agreement is amended and restated to read in its
entirety as follows: ““Closing Date” means the Trading Day mutually agreed upon by the Company and the Purchasers purchasing at least 70% of the Units at such Closing not later than three (3) Business Days following the
date of the Stockholder Approval, provided, that, the conditions set forth in Sections 2.3(a) and 2.3(b) have been satisfied or waived but, pursuant to Section 5.1, in no event later than December 31, 2012.” 

b. The definition of “Registration Rights Agreement” is hereby added in Section 1.1 of the agreement and shall read in its
entirety as follows: ““Registration Rights Agreement” means a registration rights agreement substantially in the form of Exhibit F attached hereto.” 
 c. The following defined terms contained in Section 1.1 of the Agreement are hereby deleted in their entirety: Prospectus, Prospectus Supplement, Registration Statement and Rule 424. 

3. Amendment to Article II of the Agreement. Article II of the Agreement is hereby amended as follows: 

a. Section 2.2(a)(iv), Section 2.3(a)(i), Section 2.3(b)(i), Section 2.3(b)(iv), Section 2.3(b)(v), Section
2.3(b)(vii), Section 2.3(b)(viii) and Section 2.3(b)(x) of the Agreement are each amended and restated in their entirety to read: “[INTENTIONALLY LEFT BLANK]” 

  
 1 

 b. Section 2.2(a)(vii) of the Agreement is hereby amended to replace the terms
“Section 2.3(b)(i) and (ii)” with “Section 2.3(b)(ii)”. 
 c. Section 2.3(b)(xi) of the Agreement is
hereby added and shall read in its entirety: 
 “(xi) the certificate of designation for the Preferred Stock in the form of
Exhibit E attached hereto shall have been adopted by the Company by all necessary action of the Board of Directors, and shall have been duly filed with the Secretary of State of the State of Delaware and continue to be in full force and
effect as of the Closing Date.” 
 4. Amendment to Article III of the Agreement. Article III of the Agreement is
hereby amended as follows: 
 a. Section 3.1(d) of the Agreement is amended and restated in its entirety to read as follows:

 “(d) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or
order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the
Transaction Documents (including the issuance of the Securities), other than: (i) the filings required pursuant to Sections 4.2 and 4.10, (ii) a Notification Form: Listing of Additional Shares and Notification Form: Change in the Number of
Shares Outstanding to the Trading Market for the listing of the Conversion Shares for trading thereon, (iii) the filing pursuant to Regulation D promulgated by the Securities and Exchange Commission under the Securities Act, (iv) such
filings as are required to be made under applicable state securities laws, including the California Corporate Securities Law of 1968, as amended, and the rules thereunder and (v) the Stockholder Approval.” 

b. Section 3.1(e) of the Agreement is amended and restated in its entirety to read as follows: 

“(e) Issuance of the Securities. The Shares are duly authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrants are duly authorized, and when duly executed and delivered by the Company in accordance
with the applicable Transaction Documents, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with their terms, except as limited by the Enforceability Exceptions. The Warrant Shares, when
issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Conversion Shares, when issued in accordance with the Company’s Certificate of
Incorporation, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Preferred Stock issuable
pursuant to this Agreement and the Warrants as of the date hereof and the maximum number of Conversion Shares issuable upon conversion of the Shares and the Warrant Shares as of the date hereof.” 

c. Section 3.1(f) and Section 3.1(i) of the Agreement is amended to delete “, the Prospectus and the Prospectus
Supplement” from each Section. 

  
 2 

 d. The terms “other than with respect to Exhibit 10.35 to the Company’s Quarterly
Report on Form 10-Q filed with the Commission on May 11, 2012” are deleted from the last sentence of Section 3.1(g) of the Agreement. 
 e. Section 3.1(k) of the Agreement is amended and restated in its entirety to read as follows: 
 “(k) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of
a type contemplated in this Section 3.1(k) that may be due in connection with the transactions contemplated by the Transaction Documents.” 
 f. Section 3.2(c) of the Agreement is amended and restated in its entirety to read as follows: 
 “(c) Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other
persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the registration statement contemplated by the Registration Rights
Agreement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.” 

5. Amendment to Article IV of the Agreement. Article IV of the Agreement is hereby amended as follows: 

a. Section 4.2 of the Agreement is amended and restated in its entirety to read: 

“4.2 Securities Laws Disclosure; Publicity. The Company (a) may, on or after the date hereof, issue a press release
reasonably acceptable to the Lead Purchaser and Second Lead Purchaser disclosing the material terms of the transactions contemplated by this Agreement (the “Press Release”) and may, on or after the date hereof file a Current Report
on Form 8-K describing the terms of the Transaction Documents and including the Press Release and the forms of the Transaction Documents, as exhibits thereto, with the Commission (the “Press Release 8-K”), (b) in the event the
Company Stockholders Meeting is adjourned or the Company Stockholders Meeting occurs more than two days prior to Closing, the Company may issue a press release disclosing the adjournment or results of the Company Stockholders Meeting, as applicable,
and/or may, file a Current Report on Form 8-K disclosing the same, (c) in the event this Agreement is amended, the Company may, on or after the date of such Amendment, issue a press release reasonably acceptable to the Lead Purchaser and Second
Lead Purchaser disclosing the material terms of the amendment (the “Amendment Press Release”) and may, on or after the date thereof file a Current Report on Form 8-K describing the terms of the amended Transaction Documents and
including the Amendment Press Release and the forms of the amended Transaction Documents, as exhibits thereto, with the Commission (the “Amendment 8-K”) and (d) shall file a Current Report on Form 8-K describing the terms of
the Transaction Documents and including the Transaction Documents as exhibits thereto, with the Commission, no later than 9:00 A.M. Eastern time on the first (1st) Trading Day immediately following the Closing (the “Closing
8-K”). From and after the 

  
 3 

 
Closing, no Purchaser shall be in possession of any material, non-public information received from the Company or any of its officers, directors, employees or agents with respect to the material
terms and conditions of the transactions contemplated by the Transaction Documents, except for any material, non-public information provided to the Lead Purchaser and Second Lead Purchaser pursuant to the Management Rights Letter, as a result of a
representative of the Lead Purchaser or the Second Lead Purchaser serving on the Board of Directors, or pursuant to a written confidentiality agreement entered into with such Purchaser after the date hereof. The Company and each Purchaser shall
consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the
prior consent of the Company, with respect to any press release of any Purchaser, or without the prior written consent of such Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) the filing of the Press
Release and form of Transaction Documents, (b) as required by federal securities law in connection with the filing of the Closing 8-K and final Transaction Documents (including signature pages thereto) with the Commission after the Closing Date
and (c) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (c). 

b. Section 4.9 of the Agreement is amended and restated in its entirety to read: 

“4.9 Tax Matters. The parties agree that the terms of the Shares do not give rise to a deemed stock distribution pursuant to
Section 305(c) of the Internal Revenue Code of 1986, as amended, and shall not take any position inconsistent therewith for any income tax purposes.” 
 c. Section 4.10(a) of the Agreement is amended to replace the term “September 28, 2012” with “October 31, 2012”. 

6. Amendment to Article V of the Agreement. Article V of the Agreement is hereby amended as follows: 

a. Section 5.1 of the Agreement is amended and restated in its entirety to read: 

“5.1 Termination. This Agreement shall automatically terminate if the Closing has not been consummated on or before
December 31, 2012; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties). Notwithstanding the foregoing, the Company and each Purchaser, with respect to such
Purchaser only and without any effect whatsoever on the obligations between the Company and any other Purchaser, may, by mutual written agreement, extend the term of this Agreement beyond December 31, 2012.” 

b. Section 5.20 of the Agreement is hereby added and shall read in its entirety: 

  
 4 

 “5.20 Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT
OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION
IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT.” 
 7. Amendment to Exhibits to the Agreement. 

a. Exhibit E and Exhibit F hereto, respectively, shall be added as Exhibit E and Exhibit F to the Agreement. 

b. Exhibit C to the Agreement shall be amended and restated in its entirety as set forth in Exhibit C hereto. 

8. Defined Terms. Except as otherwise stated herein, all capitalized terms used herein shall have the meanings given in the
Agreement. 
 9. Effectiveness and Effect of Amendment. This Amendment shall become effective upon the Effective Date.
Except as amended as set forth herein, the Agreement shall continue in full force and effect. Any and all references to the Agreement shall mean the Agreement as amended by this Amendment. 

10. Counterparts. This Amendment may be signed in one or more counterparts, each of which shall be deemed an original and all of
which, taken together, shall be deemed one and the same document. 
 11. Governing Law. This Amendment and all acts and
transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law. 

[Remainder of Page Intentionally Left Blank] 

  
 5 

 IN WITNESS WHEREOF, this Amendment has been executed by the parties hereto as of the date
first above written. 
  

			
	 COMPANY:
  

ALIMERA SCIENCES, INC.

		
	By:	 	/s/ Richard S. Eiswirth, Jr.
		 	 Name: Richard S. Eiswirth, Jr.
 Title: Chief Operating Officer and Chief

          Financial Officer

 SIGNATURE PAGE TO AMENDMENT
TO SECURITIES PURCHASE AGREEMENT 

 IN WITNESS WHEREOF, this Amendment has been executed by the parties hereto as of the date
first above written. 
 PURCHASERS: 
  

			
	Name of Purchaser:	  	PALO ALTO INVESTORS, LLC
		
	 Signature of Authorized Signatory of Purchaser:
	  	 /s/ Scott R. Smith

		
	 Name of Authorized Signatory:
	  	 Scott R. Smith

		
	 Title of Authorized Signatory:
	  	 VP, Chief Compliance Officer

		
	 Email Address of Authorized Signatory:
	  	 ssmith@pai-investors.com

		
	 Facsimile Number of Authorized Signatory:
	  	 (650) 325-5028

		
	Address for Notice to Purchaser:	  	 Palo Alto Investors, LLC
 Attn:
Scott Smith
 470 University Avenue

Palo Alto, California 94301
  
 With a copy to:
  

O’Melveny & Myers LLP
 Two Embarcadero
Center, 28th Floor
 San Francisco, CA 94111
 Attention: Paul Scrivano, Esq.
 Fax: (415) 984-8701

 SIGNATURE PAGE TO AMENDMENT
TO SECURITIES PURCHASE AGREEMENT 

 IN WITNESS WHEREOF, this Amendment has been executed by the parties hereto as of the date
first above written. 
 PURCHASERS: 
  

			
	Name of Purchaser:	  	 SOFINNOVA VENTURE PARTNERS VIII, L.P.
  

By: Sofinnova Management VIII, L.L.C., its General Partner

		
	 Signature of Authorized Signatory of Purchaser:
	  	 /s/ Garheng Kong

		
	 Name of Authorized Signatory:
	  	 Garheng Kong

		
	 Title of Authorized Signatory:
	  	 Managing Member

		
	 Email Address of Authorized Signatory:
	  	 garheng@sofinnova.com

		
	 Facsimile Number of Authorized Signatory:
	  	 (650) 322-2037

		
	Address for Notice to Purchaser:	  	 Sofinnova Venture Partners VIII, L.P.
 2800 Sand Hill Road, Suite 150
 Menlo Park, CA 94025

Attention: Hooman Shahlavi
 Fax: (650)
322-2037
  
 With a copy to:

		  	  
 O’Melveny & Myers LLP

Two Embarcadero Center, 28th Floor
 San
Francisco, CA 94111
 Attention: Paul Scrivano, Esq.
 Fax: (415) 984-8701

 SIGNATURE PAGE TO AMENDMENT
TO SECURITIES PURCHASE AGREEMENT 

 IN WITNESS WHEREOF, this Amendment has been executed by the parties hereto as of the date
first above written. 
 PURCHASERS: 
  

			
		
	 Name of Purchaser:
	  	 GROWTH EQUITY OPPORTUNITIES FUND III, LLC
  

By: New Enterprise Associates 14, L.P., its sole member
 By: NEA Partners 14, L.P., its general partner
 By: NEA 14 GP, LTD, its general
partner

		
	 Signature of Authorized Signatory of Purchaser:
	  	 /s/ Jake R. Nunn

		
	 Name of Authorized Signatory:
	  	 Jake R. Nunn

		
	 Title of Authorized Signatory:
	  	 Assistant Vice President

		
	 Email Address of Authorized Signatory:
	  	 jnunn@nea.com

		
	 Facsimile Number of Authorized Signatory:
	  	 (650) 388-1512

		
	 Address for Notice to Purchaser:
	  	 New Enterprise Associates 14, L.P.
 New Enterprise Associates
 2855 Sand Hill Road

Menlo Park, CA 94025
 Ph: 650-854-9499

Attention: Frank M. Torti, MD
 Email:
ftorti@nea.com
  
 With a copy to:

 
 New Enterprise Associates
 1954 Greenspring Drive, Suite 600
 Timonium, MD 21093

Attention: Louis S. Citron, Chief Legal Officer

Email: lcitron@nea.com
 Fax:
410-842-4100

		
		  	 and
 Proskauer Rose
LLP
 One International Place
 Boston,
MA 02110
 Attention: Ori Solomon

email: osolomon@proskauer.com
 Fax:
617-526-9899

 SIGNATURE PAGE TO AMENDMENT
TO SECURITIES PURCHASE AGREEMENTPR-M Non Bonus Assumption Agreement

 Exhibit 10.10 
 PR-M Non-Bonus Assumption Agreement 
  
 

 
 THIS ASSUMPTION AGREEMENT (the “Agreement”) is executed as of the 20th day of September, 2012 (“Execution Date”) by and between
Homeowners Choice Property & 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, 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, the Office of Insurance Regulation (“OIR”) has issued a Consent Order to this Insurer approving its Depopulation Plan.

 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. 

  
 1 

 PR-M 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 (q)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
(q) 3-6 of Subsection 627.351(6), Section 627.3511, and Section 627.3517, Florida Statutes, and this Agreement, as set forth in Exhibit C attached hereto. 
 F. “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. 
 G. “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. 

H. “Initial Notice” shall mean a notice, in substantially form attached as Exhibit E, mailed to a policyholders more than
thirty days prior to the Assumption Date of a Tagged Policy. 
 I. “Office” shall mean the Florida Office of Insurance
Regulation. 
 J. “Parties” shall mean the Insurer and CITIZENS. 

K. “Plan” shall mean the Plan of Operation of CITIZENS, as amended. 

L. “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. 
 M. “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. 
 N. “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. 

O. “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 (q)3-6 of Subsection 627.351(6). 
 P. “Returned Policy” shall mean a Removed
Policy that is returned to Citizens as provided in section 3.F. of this Agreement. 

  
 2 

 PR-M Non-Bonus Assumption Agreement 

 

 Q. “Subsection 627.351(6)” shall mean subsection 627.351(6), Florida Statutes
(2006), which is Citizens’ enabling statute. 
 R. “Tagged Policies” shall mean the Policies identified by
CITIZENS policy number and expiration date on Exhibit A or any supplement thereto. 
 S. “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. Such obligations include, but are not limited to,
accepting that the policy as written, and assumed, may not accurately reflect the risk. 

  
 3 

 PR-M Non-Bonus Assumption Agreement 

 

 (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. 

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 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 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. 
 (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. 
 Under current procedures, policyholders may reject Insurer’s offer of coverage and remain policyholders of Citizens. Insurers shall mail to policyholders the Initial Notice disclosing such option in
a form substantially similar to Exhibit E. 

  
 4 

 PR-M Non-Bonus Assumption Agreement 

 

 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 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. 

  
 5 

 PR-M Non-Bonus Assumption Agreement 

 

 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 B. 
 (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 B. 
 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 

  
 6 

 PR-M Non-Bonus Assumption Agreement 

 

 
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. 
 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 D. 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 Independert 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 D. 
 E. The Insurer agrees that as of the Assumption Date, 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 Indemnitees”) 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. 

  
 7 

 PR-M Non-Bonus Assumption Agreement 

 

 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 
 (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 B. 

(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. 

  
 8 

 PR-M Non-Bonus Assumption Agreement 

 

 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. 

(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. 

  
 9 

 PR-M Non-Bonus Assumption Agreement 

 

 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. 

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:	  	
		
		  	Mr. Paresh Patel
		  	Chairman
		  	 Homeowners Choice Property & Casualty Insurance Company
 5300 W. Cypress St.
 Tampa, FL 33607

		  	(813) 405-3612
		
	Notice to CITIZENS:	  	
		
		  	Mr. Barry Gilway
		  	President/CEO and Executive Director
		  	CITIZENS Property Insurance Corporation
		  	 2312 Killeam Center Boulevard

Tallahassee, Florida 32309

		  	(850) 513-3780

  
 10 

 PR-M Non-Bonus Assumption Agreement 

 

 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. 
 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. Barry Gilway
		 		 	President/CEO and Executive Director
	
	Homeowners Choice P&C Insurance Company
			
		 	BY:	 	     

		 		 	Mr. Paresh Patel
		 		 	Chairman

  
 11 

 PR-M Non-Bonus Assumption Agreement 

 

 Exhibits: 
  

	 	A.	Schedule of Policies 

  

	 	B.	Consent Order 

  

	 	C.	Timeline and Requirements for Assumption 

  

	 	D.	Audit Scope 

  

	 	E.	Initial Notice 

  
 12 

					
	 KEVIN MCCARTY
 COMMISSIONER
	 	 

 OFFICE OF INSURANCE REGULATION

 
  
	 	

  

					
	 IN THE MATTER OF:
  

HOMEOWNERS CHOICE PROPERTY

& CASUALTY INSURANCE COMPANY, INC.
	 		  	CASE NO.: 128411-12-CO
	                             
                                         
                      /	 		  	

 CONSENT ORDER 
 THIS CAUSE came on for consideration as a result of HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC.’S (hereinafter “HOMEOWNERS CHOICE”) proposal to remove selected
personal residential policies from CITIZENS PROPERTY INSURANCE CORPORATION (hereinafter “CITIZENS”), which was submitted to the OFFICE OF INSURANCE REGULATION (hereinafter “OFFICE”) for its review on August 20, 2012. 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 has been established in accordance with the provisions of Section 627.351(6), Florida Statutes, as amended, to provide
insurance for residential and commercial property qualified risks under circumstances specified in the Statute. 
 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. CITIZENS submitted, and the OFFICE adopted by Order No. 94539-08, a plan of
depopulation. CITIZENS further submitted, and the OFFICE adopted by Order No. 125161-12, amendments to the plan of depopulation. This proposed Consent Order is predicated on the terms and conditions of these two Orders. HOMEOWNERS CHOICE shall
abide by the terms and conditions of the CITIZENS depopulation plan as a condition of issuance of this Consent Order. 

  
 Page 1 of 13

 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 August 20, 2012, HOMEOWNERS CHOICE submitted a
proposal to remove selected personal residential policies from CITIZENS. The plan provides for an assumption of up to sixty-two thousand (62,000) multiple peril policies from CITIZENS’ personal lines account and thirteen thousand
(13,000) multiple peril policies from CITIZENS’ coastal account. HOMEOWNERS CHOICE plans to assume the CITIZENS’s 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 November 6, 2012, or at a later
date approved by the OFFICE and CITIZENS, 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 provided such plan would be
retroactive to policies subject to this Consent Order. If the OFFICE approves a bonus plan for use by other take-out companies or for other transactions during the 2012 policy year, the bonus may be paid to HOMEOWNERS CHOICE in 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, shall 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. 

  
 Page 2 of 13

 b. HOMEOWNERS CHOICE shall accumulate any objections, and shall 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 shall not be required to make additional payments, nor take any action other than to express the desire to remain with CITIZENS in writing, by electronic mail, or by telephone on or before thirty (30) days following the
date of their policy removal. 
 c. All communications with agents and policyholders regarding any policies to be removed from
CITIZENS must be done in accordance with instructions by CITIZENS and the OFFICE. HOMEOWNERS CHOICE shall obtain prior approval from the OFFICE of any letters sent to policyholders regarding any policies to be removed from CITIZENS. 

7. HOMEOWNERS CHOICE acknowledges neither approval by CITIZENS, nor entry into this Consent Order by the OFFICE, constitutes a guarantee
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. 
 8. 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. 

  
 Page 3 of 13

 9. HOMEOWNERS CHOICE has submitted the proposed reinsurance documentation and financial
projections for assumption of up to seventy-five thousand (75,000) multiple peril policies, expected to be assumed on November 6, 2012 or on subsequent dates approved by the OFFICE and CITIZENS. Each additional assumption of CITIZENS
policies by HOMEOWNERS CHOICE shall be subject to advance written approval by the OFFICE. 
 10. 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 the proposal. 
 11. 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 it 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. 
 12. 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. 

  
 Page 4 of 13

 13. The parties agree this Consent Order will be deemed executed when the OFFICE has signed
a copy of this Consent Order bearing signature of HOMEOWNERS CHOICE, or its authorized representative, notwithstanding the fact the copy was transmitted to the OFFICE electronically. HOMEOWNERS CHOICE agrees the signature of its representative as
affixed to this Consent Order shall be under seal of a Notary Public. 
 14. Each party to this action shall bear its own costs
and attorney fees. 
 15. This Consent Order replaces Order No. 128411-12 that was issued by the OFFICE on
September 6, 2012. 
 IT IS THEREFORE ORDERED 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 seventy-five thousand (75,000) multiple peril policies, for the initial assumption starting on or about November 6, 2012, in accordance with the
proposal to remove selected policies from CITIZENS, any agreement(s) between HOMEOWNERS CHOICE and CITIZENS, and this Consent Order. 
 (C) Regarding all reinsurance matters, HOMEOWNERS CHOICE shall: 
 (i) Maintain
adequate reinsurance coverage at all times; 
 (ii) Submit to the OFFICE any and all replacement or additional reinsurance
agreement(s), or amendment(s) to reinsurance agreement(s) that materially change 

  
 Page 5 of 13

 
the reinsurance coverage in (c)(i). The agreement(s), amendment(s) or plans shall be submitted to the OFFICE for review, and approval, sixty (60) days prior to the date of effectuation of
any such agreement(s) or amendment(s); 
 (iii) Notify the OFFICE of any termination of any of its reinsurance agreements. The
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. 
 (D) 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-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 

  
 Page 6 of 13

 
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 the 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 the CITIZENS policies; 
 (E) 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 at the first such renewal onto HOMEOWNERS CHOICE’S policy form, unless such policies are canceled by HOMEOWNERS CHOICE for a lawful reason; 

(F) 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

  
 Page 7 of 13

 
retrospective increase in rates or the 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; 
 (G) For a period of three (3) years immediately following the date of entry of this
Consent Order, HOMEOWNERS CHOICE shall abide by the 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;

 (H) Regarding required documentation to be maintained by HOMEOWNERS CHOICE relating to policies removed from CITIZENS:

 (i) HOMEOWNERS CHOICE is required to track all agents, as well as the related policy information, who have declined to
participate in the takeout process. This information shall be submitted to Citizens by the deadline published in the Citizens Assumption Calendar. Citizens will then mail out notices informing the policyholders of the agent’s declination. This
will allow the affected policyholders the opportunity to address the declination with their agent and possibly receive their agent’s approval in time to be included in the current takeout. 

(ii) HOMEOWNERS CHOICE is required to track all agents, as well as the related policy information, who after discussing with the
policyholder, decide to participate in the takeout process and submit this information to Citizens by the deadline published in the revised 2012 Assumption Calendar. 
 (iii) HOMEOWNERS CHOICE is required to keep a record of all agents who decline participation along with an explanation for the declination. 

  
 Page 8 of 13

 (iv) When contacting an agent regarding a potential takeout policy, HOMEOWNERS CHOICE is
required to provide each agent with the policy form to be used, appointment contract and a copy of HOMEOWNERS CHOICE’S most currently available financial statement. 
 (I) HOMEOWNERS CHOICE is required to comply with the following requirements when soliciting an agent’s permission to participate in the assumption process: 

(i) HOMEOWNERS CHOICE must utilize email and at least one other method for contact (i.e. call, fax or regular mail); 

(ii) HOMEOWNERS CHOICE must send out a direct solicitation to the agent of record and copy the agency principal; 

(iii) HOMEOWNERS CHOICE must provide all agents a minimum of 14 days to review the solicitation. This will allow agents adequate time to
research the company and make an informed decision; 
 (iv) HOMEOWNERS CHOICE must provide a copy of the appointment contract.
HOMEOWNERS CHOICE may opt to provide the agent a link to its website containing the required information; 
 (v) HOMEOWNERS
CHOICE must provide a copy of the policy form. HOMEOWNERS CHOICE may opt to provide the agent a link to its website containing the required information; 
 (vi) HOMEOWNERS CHOICE must provide a chart identifying any differences in coverage from Citizens, which will help both the agent and the policyholder in making an informed decision; 

  
 Page 9 of 13

 (vii) HOMEOWNERS CHOICE must provide a list of policies specific to the agent that it would
like to assume; 
 (viii) HOMEOWNERS CHOICE must provide a contact number of qualified staff to answer agent’s questions;

 (ix) HOMEOWNERS CHOICE must provide an overview of its strategy for handling claims (cat and non-cat); 

(J) Should the OFFICE determine HOMEOWNERS CHOICE has failed to materially comply with terms of this Consent Order, the proposal to
remove selected policies from CITIZENS, including its attachments, 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, rule or restrictions, as may be deemed appropriate by the
OFFICE. 

  
 Page 10 of 13

 WHEREFORE, the proposal to remove up to seventy-five thousand (75,000) multiple peril
policies, for the initial assumption starting on or about November 6, 2012, 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 18th day of September, 2012. 
  

					
	

	  	 

	  	Kevin M. McCarty, Commissioner
	  	Office of Insurance Regulation
	  	
	  	
	  	
	  	
	  	
	  	
	  	
	  	

  
 Page 11 of 13

 By execution hereof, HOMEOWNERS CHOICE PROPERTY & CASUALTY INSURANCE COMPANY, INC.
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, INC. to the terms and conditions of this Consent Order. 
  

	
	 HOMEOWNERS CHOICE PROPERTY &
 CASUALTY INSURANCE COMPANY, INC.

	
	 

	Paresh Patel, Chairman

 Corporate Seal 
 STATE OF Florida 
 COUNTY OF Hillsborough 
 The foregoing instrument was acknowledged before me this 13 day of September 2012, 

							
	by	 	 Paresh Patel
	 	as	 	 Chairman

		 	(name of person)	 		 	    (type of authority ..... e.g. officer, trustee attorney in fact)

							
	for	 	 Homeowners Choice Property & Casualty Insurance Company, Inc
	 	
		 	(company name)	 		 	

  

					
	

	  	 

	  	(Signature of the Notary)
	  	  
 Regina Luna

(Print, Type or Stamp Commissioned Name of Notary)

	  	

 Personally Known  þ    OR Produced
Identification          
 Type of Identification Produced
                                        

  
 Page 12 of 13

 COPIES FURNISHED TO: 
 Bobbi Scott, Depopulation Manager 
 Citizens Property Insurance Corporation 

Corporate Offices 
 101 North Monroe Street,
Suite 1000 
 Tallahassee, FL 32301 

Bobbi.Scott@citizensfla.com 

Mr. Scott R. Wallace, President 

Homeowners Choice Property
 & Casualty
Insurance Company, Inc. 
 5300 W. Cypress Street, Suite 100 
 Tampa, FL 33607 
 swallace@hcpci.com 

Carolyn Morgan, Director 
 Office of Insurance
Regulation 
 P&C Financial Oversight 
 200 East Gaines Street 
 Tallahassee, FL 32399-0329 

David Altmaier, Chief Analyst 
 Office of
Insurance Regulation 
 P&C Financial Oversight 
 200 East Gaines Street 
 Tallahassee, FL 32399-0329 

Amanda Rudock, Financial Examiner/Analyst II 

Office of Insurance Regulation 
 P&C
Financial Oversight 
 200 East Gaines Street 
 Tallahassee, FL 32399-0329 
 Amanda.Rudock@floir.com 

Catharine Schoenecker, Assistant General Counsel 

Office of Insurance Regulation 
 Legal Services
Office 
 200 East Gaines Street 

Tallahassee, FL 32399-0333 

Catharine.Schoenecker@floir.com 

  
 Page 13 of 13

 PR-M Non-Bonus Assumption Agreement 

 

 EXHIBIT C 
 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. Alt 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 Assumption Agreement and an executed Requirements and Deadline Letter to Citizens.

 At Least 40 Days Before Initial Assumption 

 

	 	•	 	 The assuming carrier’s policy selection and company information for the assumption notice (i.e. company letterhead with logo, signature, etc.)
must be submitted to Citizens. By submitting this policy selection file, the assuming carrier is certifying that all associated agents have either been appointed by the assuming carrier or agreed to have their policies assumed under the provisions
of “Consumer Choice.” 

  

	 	•	 	 Per Order 94539-08 assuming carriers must submit a list of policies (Access format) associated with agents that have declined to participate or did not
respond to the assuming carrier (specific to this assumption date). The file must be submitted to Citizens in Access format and include the Citizens policy number and policyholders name. 

 

	 	•	 	 Assuming carriers must provide contact information to be inserted into a notice to policyholders whose agents have declined to participate in the
assumption process. This includes legal name, mailing address, and a contact number. Per Order 94539-08, the notice will provide the policyholder with the offering insurer’s contact information and allow the policyholder to contact the carrier
directly to make a determination on their own about the offer of coverage from the carrier. The assuming carrier must have knowledgeable staff available to answer the policyholders questions regarding the offer, coverages, etc. and be ready to write
the coverage outside of the assumption process. 

 At Least 35 Days Before Initial Assumption

  

	 	•	 	 The assuming carrier must mail notice at least 35 days prior to the assumption date giving all policyholders the option to choose not to be assumed
(“opt out”). The notice must be approved by the OIR and Citizens and must be sent to every policyholder the assuming carrier intends to assume. It is the assuming carriers responsibility to collect, retain and report responses from the
above notice. All policyholders who indicate that they do not want to be assumed must be collected in an Access database (policyholder name and Citizens policy number). 

  
 13 

 PR-M Non-Bonus Assumption Agreement 

 

 At Least 6 Days Before Initial Assumption 

 

	 	•	 	 The assuming carrier must provide the Access database with the name and associated Citizens policy number for all policyholders that have chosen not to
be assumed. Citizens will remove those policyholders from the assuming carriers policy selection file for that assumption date. 

  

	 	•	 	 Citizens reserves the right to modify any deadline or requirement. 

  
 14 

 PR-M Non-Bonus Assumption Agreement 

 

 EXHIBIT D 
 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 

  
 15 

 PR-M Non-Bonus Assumption Agreement 

 

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

  
 16 

 Exhibit E 
 Initial Notice 

 Dear Citizens Policyholder: 
 When you originally applied for coverage with Citizens Property Insurance Corporation (Citizens), you were given notice that your policy could be removed from Citizens if coverage became available for
your property from another insurer. We are pleased to inform you that ABC Insurance Company (ABC) is offering you property insurance coverage beginning [Assumption Date]. Your agent has accepted an appointment with ABC and has agreed to continue to
service your insurance needs through ABC. 
 YOU DO NOT NEED TO TAKE ANY ACTION TO BEGIN YOUR INSURANCE COVERAGE WITH

 ABC INSURANCE COMPANY. 
 ABC is a Florida licensed insurance company based in [City, Florida]. Information about ABC is available at [www.ABCinsurance.com]. A coverage comparison and financial information about ABC can be found
at [company page on OIR website]. ABC believes you should carefully consider this offer of coverage. Here are some important reasons why: 
  

	 	•	 	 ABC provides coverage for certain Other Structures, such as screened enclosures and gazebos that Citizens does not cover. 

 

	 	•	 	 ABC provides additional coverage options not offered by Citizens. 

 

	 	•	 	 ABC offers secure, online internet access to your policy including the ability to choose electronic notifications and electronic payment.

  

	 	•	 	 ABC offers quarterly, semi-annual, and annual installment plans to assist you with budgeting your premiums. 

 

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

 You are not required to accept this offer from ABC. If you reject this offer, as described below, you will continue to
receive coverage through Citizens. You have two opportunities to reject this offer. You have until [Date] to reject this offer before your policy is assumed by ABC. Also, within 30 days after [Assumption Date], you have a final opportunity to reject
this offer. To reject this offer you must complete and sign the enclosed form and return it to ABC. 
 IMPORTANT NOTICE

 If you are considering electing to remain covered by Citizens, you will continue to be subject to special Citizens policyholder
surcharges as high as 45% over and above your total policy premium if Citizens sustains significant losses. Also, you will continue to be subject to required Citizens rate increases. Additionally, the reduced coverages now being provided by Citizens
are likely less comprehensive than the coverages being offered by ABC. 
 We look forward to providing you a high level of service as
your insurance company. if you have any specific coverage or rate questions, please call your insurance agent. For general questions about ABC, please call toll free at [ABC’s Number], Monday through Friday from [Hours of Operation], or visit
our website at [www.ABCinsurance.com] to learn more about us and our commitment to you. 

 Opt Out Form 
 I am rejecting the offer of coverage by ABC Insurance Company dated [Date] and elect to continue my property insurance coverage with Citizens. 
 I understand and acknowledge that if I remain a Citizens policyholder: 
  

	 	•	 	 I may have to pay a special Citizens policyholder surcharge as high as 45% over and above my current policy premium if Citizens sustains significant
losses; and 

  

	 	•	 	 The reduced coverages now being provided by Citizens are likely less comprehensive than the coverages offered by ABC; and 

 

	 	•	 	 I continue to be subject to required Citizens rate increases; and 

 

	 	•	 	 I continue to be subject to additional offers of coverage from other insurers in the future. 

 

					
	Insured Signature:	 	  
	 	
		
	Insured Name:	 	
		
	Citizens Policy Number:	 	
		
	Date:	 	

 To ensure timely rejection of this offer, you must sign and return this form to ABC Insurance Company before [Date] by
fax, mail or email as instructed below. 
 Fax: (800) 123-4567 
 Mail: ABC Insurance Company 
 PO Box 123 
 City, FL 33333-3333 
 Email: OptOut@ABCinsurance.com 

[Form Number]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}]]