Our goals are clear and specific. Reduce the size of Citizens while serving our customers who rely on us to protect what in most cases is their most valuable asset. The deal approved this week accomplishes both of those objectives. 

Under the agreement, Heritage will take over up to 60,000 policies and pay claims and other expenses going back to January 1, 2013. Citizens will pay Heritage approximately $52 million in policyholder premium to pay current and future losses, expenses and the placement of reinsurance. In addition, Heritage has agreed to honor Citizens' premium caps already in place and keep customers for at least three years. 

In addition to reducing exposure, Citizens will save $10 million immediately by reducing its premium to the Florida Hurricane Catastrophe Fund, which will calculate its 2013 season premiums at the end of June. The deadline made swift board action a critical component of the agreement. But make no mistake, Citizens and state insurance regulators did their homework and carefully evaluated all aspects of the Heritage agreement.  

For the 60,000 policyholders, the arrangement may provide more coverage options and will reduce their assessment risk, which for Citizens policyholders can reach 45 percent of premium. 

While Citizens is in the best financial shape it has ever been, we cannot lose sight of the cold hard fact that we fall about $4 billion short in the event of a major storm. That means that Florida taxpayers will be hit by assessments to pay those claims. Step by step we are taking the difficult yet necessary steps to reduce the risk of that "hurricane tax."  

The Heritage agreement, which includes company guarantees not normally included in takeout arrangements, represents the kind of rapid, well-executed action that is needed to respond to quickly evolving market conditions. That said, the transaction did not appear overnight but was closely modeled after a transaction completed earlier this year and followed months of negotiations between senior Citizens financial officials and the company. 

I am proud of our dedicated and talented Citizens staff for putting together an agreement that protects the interests of our policyholders while taking the necessary steps to reduce the size of Citizens and return it to its original purpose as an insurer of last resort.