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lost a title during the fourth quarter of 2015 that it hasbeen eager to shed.

Thestate-run insurer no longer ranks as Florida's largest personal and commercial residentialproperty insurer by policies in force on an individual basis, according toQuarterly Supplemental Report data collected and recently released by theFlorida Office of Insurance Regulation. High levels of depopulation activityand, to a lesser extent, various other steps taken by Citizens to return tomore of an insurer of last resort have paid off in recent years as privatecarriers' appetite for Florida residential property insurance expands.

Citizensended 2015 with 488,476 personal and commercial residential property policiesin force, down 12.4% from Sept. 30, 2015, and 24% from Dec. 31, 2014.Universal Insurance HoldingsInc. unit UniversalProperty & Casualty Insurance Co., which lagged Citizens'policy count by 12,697 as of Sept. 30, 2015, finished the year with 550,203personal and commercial residential policies in force.

Policies-in-forcestatistics logged by FLOIR in what the regulator classifies as the personal andcommercial residential business lines do not capture Citizens' business in itsentirety, but they are directionally consistent with the total-filed resultsposted by the company. Citizens reported 503,865 policies in force as of Dec.31, 2015, down 12.2% on a sequential-quarter basis and 23.8% year over year.Its total policy count declined further as of Feb. 29 to 485,588. President andCEO Barry Gilway told Citizens' board of governors during a March meeting thatthe company's policy count reached the lowest recorded point since its August2002 inception during January at 484,788. The company reported total policiesin force of more than 1 million as recently as Jan. 31, 2014.

Acrosspolicy types, Citizens reported that 689,408 policies had been removed throughdepopulation from 2014 through 2015. Another 33,434 policies had been removedin 2016 on a year-to-date basis through March 22. Offers by private carriers toassume select Citizens policies, effective April 19, remain outstanding.

UniversalProperty & Casualty has not been an active participant in Citizens' recentdepopulation efforts, but several of the Florida companies that sawdouble-digit growth in personal and commercial residential property insurancepolicy count have played a major role in the process.

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unit Heritage Property &Casualty Insurance Co., which alone accounted for 36.6% of thepolicies removed from Citizens through depopulation during 2015, ended the yearwith Florida personal and commercial residential property policies in force of266,831. That marked a year-over-year increase of 22.7% for a company thatranked No. 4 overall in the market.

Amongthe other 16 individual carriers that ended 2015 with at least 100,000 policiesin force in the applicable business lines, two expanded their policy counts atan even more rapid rate: SecurityFirst Insurance Co. and Federated National Holding Co.'s

 "We believe [Security First] is well-positionedto take advantage of the changing Florida homeowners insurance market,"the company, which experienced a 34.5% rise in personal and commercialresidential property policies in force on a year-over-year basis, said in themanagement's discussion and analysis section of its . Security Firstnoted in the filing that it implemented "significant rate changes"during 2014 that "resulted in a surge of new business and increasedrenewal retention in 2015." The company's parent contributed $19.1 millionin capital from 2012 through 2015 to support its expansion.

SecurityFirst said it planned to submit a rate increase in early 2016 "toameliorate the effect of the Assignment of Benefits phenomenon" that resulted inhigher incurred losses during 2015. Citizens and other leading Floridaresidential property insurers have accused plaintiffs' attorneys, waterremediation firms and certain other types of contractors of using and abusingpost-loss assignment of benefits in non-weather-related property insuranceclaims through unnecessary and costly litigation.

FederatedNational Insurance, which experienced an increase in personal and commercialresidential property policies in force of nearly 33%, attributed its expansionin its 2015 MD&Ain part to ongoing agent-outreach efforts and a high Florida homeownersretention rate. The Federated National holding company noted in a recentinvestorpresentation that the insurer is one of a few Florida homeownerscarriers appointed to write voluntary business through the Florida agents ofAllstate Corp.

AlthoughCitizens no longer ranks as Florida's largest personal and commercialresidential property insurer by policies in force, it retains that position byseveral other metrics, including the total dollar value of the associatedexposure and direct premiums written attributable to the policies in force. Itmaintains a leadership position by policy count in certain key geographies,such as the tri-county region of south Florida. But even in the combination ofBroward, Miami-Dade and Palm Beach counties, Citizens' market share of 16.6% asof Dec. 31, 2015, marked a decline from nearly 21.2% a year earlier.

Gilwaycautioned in his March remarks to the board that the extent of theassignment-of-benefits abuse in the tri-county area threatened to makeCitizens' policies even more competitive with the private market, given theglide path that caps its annual rate increases on individual policies at 10%.He also noted that some private carriers would be taking more restrictivepostures as it pertains to writing and assuming business from that region inlight of the deterioration in claims activity. Federated National, forinstance, said in the investor presentation that it was seeking to reduce itstri-county geographic concentration.

DespiteCitizens' declining share of the policies in force in Broward, Miami-Dade andPalm Beach, tri-county business accounted for an increasing percentage of thecompany's personal and commercial residential property business: 49.6% of theDec. 31, 2015, policy count as compared with 46.6% a year earlier.

Citizens'movement in the Florida market-share rankings had been foreseeable , given theextent of the notice provided by private carriers for forthcoming takeoutactivity. The directions in which Citizens and other leading marketparticipants might go in 2016 is less predictable, especially as carriersrespond to the higher claims volumes through rate actions and changes inbusiness appetite. As HCI GroupInc.'s HomeownersChoice Property & Casualty Insurance Co. Inc. stated in its2015 MD&A,"near-term volatility" may be ahead for the Florida residentialproperty insurance market.