The number of policies in the U.S. residual market fell slightly in 2012 but demand remains high—threatening state finances and the pocketbooks of all residents.
An updated report from Robert P. Hartwig, president of the Insurance Information Institute, says that although total U.S. residual market policies-in-force were about 3.2 million from a record 3.3 million in 2011, "this market of last resort remains the market of first choice for many vulnerable, high-risk coastal properties." 
The residual market was originally intended to provide insurance to high-risk policyholders who can't get coverage from the standard market. But many—such as Florida Citizens Property Insurance Corp.—have ballooned to become major insurance providers. Florida Citizens is the largest provider of property insurance in Florida.
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