Even before the fatal gamble by the Poe Group began to play out this spring, the pace of companies removing policies from Citizens had slowed considerably. Through April 30, insurers had assumed 51,960 policies from Citizens, compared to 293,684 in all of last year and 158,416 in 2004. The majority of take-outs reportedly occurred prior to the start of hurricane season.

With announcements from State Farm and other companies of cancellation of thousands of policies, and now the collapse of Poe with its more than 300,000 homeowner policies, fears abound concerning the impact on Citizens' financial stability. It reported a combined deficit of $2.2 billion in 2004 and 2005. To offset the deficit, the state's insurer of last resort so far this year has received financial help via a $715 million appropriation from the state legislature, two policyholder rate increases, plus a one-time 2.5-percent surcharge on all residential property policies in the state.

With all these factors it is reported that Citizens could grow from 850,266 policies as of April 30 to at least one million or more in 2006, making it the largest residential property insurer in the state. Dramatically rising costs and limited availability of reinsurance are named as the culprit.