UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (or Date of Earliest Event Reported):
(Exact Name of Registrant as Specified in Its Charter)
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(I.R.S. Employer Identification Number) |
(Address of Principal Executive Offices)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Name of each exchange on which registered |
Item 1.01 Entry into a Material Definitive Agreement
On September 26, 2023, our subsidiary Homeowners Choice Property & Casualty Insurance Company, Inc. entered into an Assumption Agreement with Citizens Property Insurance Corporation, an entity created by the Florida Legislature. The agreement sets forth the terms by which our insurance subsidiary may assume policies from Citizens when such assumptions are approved by the Florida Office of Insurance Regulation. The Assumption Agreement appears as Exhibit 99.1 to this Form 8-K.
Item 9.01 Exhibits
Exhibit 99.1 Assumption Agreement
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: October 2, 2023.
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HCI GROUP, INC. |
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BY: |
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/s/ Andrew L. Graham |
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Name: Andrew L. Graham Title: General Counsel |
A signed original of this Form 8-K has been provided to HCI Group, Inc. and will be retained by HCI Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 99.1
2023 Assumption Agreement
THIS ASSUMPTION AGREEMENT (the "Agreement") is effective as of the _26_ Day of
September, 2023 by and between Homeowners Choice Property & Casualty Insurance Co, Inc. 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), Florida Statutes ("Citizens").
WHEREAS, Citizens has adopted a depopulation program pursuant to Section 627.351(6)(q)3., Florida Statutes, and Section 627.351(6)(ii), Florida Statutes, which was submitted to the Office of Insurance Regulation ("Office") and which was approved on December 2, 2016 via Amended Order Approving Citizens Property Insurance Corporation's Personal Residential and Commercial Lines Non-Bonus Depopulation Plan in Case No. 199206-16 (hereinafter the depopulation plan approved by the Office's December 2, 2016 order is referred to as "the Plan"), whereby qualified insurers assume policies from Citizens;
WHEREAS, effective January 1, 2017, the Plan amended and superseded previous programs that were adopted by the Citizens;
WHEREAS, Insurer wishes to participate in the Program and submitted a plan for assuming Citizens policies to the Office and wishes to assume policies on a direct basis from Citizens such that Citizens will no longer be responsible as to liability or, except as expressly set forth in this Agreement or in the Plan, servicing of such assumed policies;
WHEREAS, the Office has issued a consent order dated September 1, 2023, in Case No. 31525223-CO, and may issue additional orders or directives to Insurer approving the Insurer's plan for assuming policies from Citizens (each an "Office Approval"); and
NOW THEREFORE, in consideration of the mutual rights and obligations stated herein, Citizens and Insurer agree as follows:
1. Definitions.
If a capitalized term is not otherwise defined herein, it shall have the same definition as that provided in the Plan. The following definitions apply to this Agreement:
"Assumed Policy" refers to any policy that has been assumed, removed, or taken-out from Citizens pursuant to the Plan by Insurer.
"Assumption" refers to any take-out or removal of policies from Citizens by Insurer in accordance with the Plan.
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
"Assumption Offer" refers to Insurer's offer to assume the coverage and liabilities of a policyholder's policy as articulated in a Policyholder Notice or as otherwise set forth in the Plan during a given Depopulation Cycle.
"Assumption Term" refers to the term during which Insurer retains obligations relating to Assumed Policies.
"Depopulation Cycle" refers to the process for selecting and removing policies from Citizens in accordance with the Plan, including the relevant dates pertaining thereto, starting with the Office Approval and concluding with the end of the Assumption Period of all Assumed Policies.
"Depopulation Guides" refers to publications provided by Citizens to companies that are interested in assuming policies from Citizens and setting forth procedures for completing such Assumptions.
"Office Approval" refers to an order or directive of the Office or other agency action authorizing an Insurer to select a specified number and type of policies for Assumption from Citizens.
"Policyholder Notice" refers to a written notice, approved by the Office, from Citizens to a policyholder regarding all Insurers requesting to assume the policy. In accordance with the eligibility thresholds established in Section 627.351(6)(ii)3., Florida Statutes, the notice will provide information on whether the policyholder has the option to accept an Assumption Offer or to reject any Assumption Offers, or whether the policy is ineligible for coverage with Citizens and will be non-renewed.
"Requirements and Deadlines Letter" refers to a written letter or notice that is sent to the Insurer detailing certain requirements, dates, and deadlines to which the Insurer must adhere in a given Depopulation Cycle.
2. Term, Conditions, and Incorporation of the Plan.
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
3. Agent Appointments.
All policies that Insurer selects for Assumption must have an agent of record who is appointed with Insurer or who has entered into a limited servicing agreement with Insurer authorizing such agent of record to service the policy if the policy is assumed. By signing this Agreement, the Insurer agrees that in selecting policies for Assumption, it is certifying to Citizens that the agents of record for such policies are either appointed by Insurer or have entered into a limited servicing agreement with Insurer in accordance with this Agreement and with the Plan. The Insurer agrees that, for any policies assumed, it will pay commissions in accordance with Section 627.351(6)(q)3.a., Florida Statutes, and any other relevant statutes and rules. The Insurer agrees to comply with the requirements of Section 627.351(6), Florida Statutes, concerning its obligation to affected agents. Both parties acknowledge policyholder rights under Section 627.3517, Florida Statutes.
4. Assumption Procedures.
In addition to the provisions in the Plan, Insurer acknowledges that Citizens may set forth additional procedures or requirements in the Depopulation Guides and the Requirements and Deadlines Letters, which may be from time to time amended by Citizens, and that with each scheduled Assumption, the Insurer will review and comply with such requirements and procedures set forth.
5. Selection and Removal of Policies.
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
6. Office Approval.
In entering this Agreement, Citizens relies on Insurer's representations to the Office and its continuing compliance with the terms of each Office Approval and further directives of the Office. Insurer agrees to continue its compliance with each Office Approval and all such directives.
7. Notices.
(i) For commercial lines residential policyholders, the Insurer shall accumulate all elections to remain with Citizens and facilitate the return of such commercial lines residential policyholders to Citizens, in accordance with the Plan;
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
(ii) A commercial lines non-residential policyholder may not elect for such commercial non-residential policy to remain with Citizens upon being notified of the Assumption.
8. Right of Access, Inspection or Audit.
For the purposes of monitoring the success of the Assumption, Citizens or its representatives, upon one business day's advance written notice, shall be entitled to access, review, or audit, at Insurer's sole expense, the relevant books and records of Insurer during normal business hours. To the extent necessary to carry out the terms of this Agreement, Insurer, at its sole expense, shall be entitled to access and review of Citizens' records as they pertain to the Assumed Policies, including notices of cancellation and declarations pages.
9. Insurer's Continuing Obligations.
Insurer, during the period of this Agreement, shall remain duly licensed and authorized as an admitted insurer to transact property and casualty insurance business in the State of Florida and to transact the lines of insurance applicable to the Assumed Policies, and in compliance with Florida statutes, rules, and regulations governing its insurance business, and with this Agreement. If Insurer becomes subject to any regulatory discipline, financial impairment or insolvency issues, Insurer must report such issues to Citizens immediately.
10. Breach, Default and Remedies.
A. Events of Default. A default under this Agreement occurs in the event of any material breach of an obligation, representation or warranty of a party as set forth in this Agreement. Further, the following regulatory events shall constitute a default:
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
non-renewing its non-assumed and Assumed Policies; or
(iv) Insurer violates any term or condition of an order or directive of the Office.
B. Remedies. Should Insurer default, Citizens may prohibit Insurer from further Assumptions pursuant to this Agreement or any future agreement. 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 equity.
11. Attorney's Fees.
If either of the parties hereto brings an administrative or court action arising out of or related to this Agreement, the prevailing party shall be entitled to recover its legal expenses, including reasonable attorney's fees and costs, including attorney's fees and costs for any appeals taken.
12. Underwriting Information and Procedures.
13. Survival of Obligations.
This Agreement shall be binding upon the parties, their legal representatives, successors and assigns.
14. Florida Law and Jurisdiction.
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
It is acknowledged that this Agreement is executed in and shall be construed and governed exclusively by and in accordance with the laws of the State of Florida. The state courts in Leon County, Florida, shall have exclusive jurisdiction over any controversy between the parties arising out of or related to this Agreement.
15. Assignment.
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, as defined in the Florida Insurance Code, of Insurer is deemed a transfer of this Agreement requiring Citizens' written consent.
16. 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.
17. Modification.
No change or modification of this Agreement shall be valid unless in writing and signed by all of the parties hereto. The parties agree that no oral modification of this provision is enforceable or valid.
18. 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, email or by facsimile transmission and shall be addressed as follows:
Notice to Insurer:
Karin Coleman
President
Homeowners Choice Property & Casualty Insurance Co, Inc.
3802 Coconut Palm Dr
Tampa, FL 33619
813-405-3600
kcoleman@hcigroup.corn
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
Notice to Citizens:
Judy Grunewald
Depopulation & FMAP - Manager
Citizens Property Insurance Corporation
2101 Maryland Circle
Tallahassee, FL 32303
Email: Depop.Questions@citizensfla.com
Notices sent by hand delivery shall be deemed delivered on the date of hand delivery. Notices sent by overnight carrier shall be deemed delivered on the second business day after being placed into the hands of the overnight carrier. Notices sent by registered or certified mail shall be deemed delivered on the fifth 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. Notices sent via email should be deemed delivered on the same business day except if delivered on a weekend or holiday in which case it will be deemed delivered on the next business day.
19. Compliance with Laws.
Insurer agrees to comply with all applicable laws, regulations, and directives of the Office.
20. 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.
21. Confidentiality.
Insurer agrees to maintain the confidentiality of all policyholder information provided and agrees that all such information provided by Citizens shall be used strictly to select policies for assumption, adjust claims, service Assumed Policies and not for any other purpose.
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
The failure of Citizens to insist on strict compliance with this Agreement or exercise any right or remedy hereunder to enforce any provision of this Agreement shall not constitute a waiver of any rights contained herein nor stop the Parties from thereafter demanding full and complete compliance or from exercising any remedy in the future. The waiver of any breach or default shall not constitute a waiver of any different or subsequent breach or default.
Insurer acknowledges that Citizens data, policy forms and manuals include the intellectual properties of third parties including Insurance Services Office and its affiliates. Insurer agrees to secure a written license from such third parties and to provide a copy of same to Citizens when it requests data, forms, manuals or other materials from Citizens.
Without the prior written consent of Citizens which shall not be unreasonably withheld, Insurer shall not publish or use Citizens' name, logo, or symbols from which Citizens' name may be reasonably inferred or implied. This includes but is not limited to using Citizens' name, logo or symbol in any research, solicitations, advertisements, promotions or any other publicity matter relating directly or indirectly to this Agreement.
"SIGNATURES TO FOLLOW ON NEXT PAGE"
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Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
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 |
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BY: |
/s/ Timothy M. Cerio |
Timothy M. Cerio |
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President/CEO and Executive Director |
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Date: |
September 26, 2023 |
Homeowners Choice Property & Casualty Insurance Co, Inc. |
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BY: |
/s/ Karin Coleman |
Karin Coleman |
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President |
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Date: |
09/06/2023 |
Page 10 of 10
Citizen Property Insurance Corporation
Homeowners Choice Property & Casualty Insurance Co, Inc.
Cover |
Sep. 26, 2023 |
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Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Sep. 26, 2023 |
Entity Registrant Name | HCI Group, Inc. |
Entity Central Index Key | 0001400810 |
Entity Emerging Growth Company | false |
Entity File Number | 001-34126 |
Entity Incorporation State Country Code | FL |
Entity Tax Identification Number | 20-5961396 |
Entity Address, Address Line One | 3802 Coconut Palm Drive |
Entity Address, City or Town | Tampa |
Entity Address, State or Province | FL |
Entity Address, Postal Zip Code | 33619 |
City Area Code | 813 |
Local Phone Number | 405-3600 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of each class | Common Stock |
Trading Symbol(s) | HCI |
Name of each exchange on which registered | NYSE |
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