Citizens Property Insurance Corp. officials took the first step Thursday toward approving a plan that would lend private insurers up to $350 million in surplus funds to take over some of its policies, but the plan is already receiving some pushback from critics of the state-run company.

Members of Citizens’ depopulation committee approved the plan in principle, but some members expressed concerns about the details of contracts with private companies.

“If we give up only the most desirable policies ... how are we impacting our cash flows?” said Citizens chairman Carlos Lacasa. “To me depopulation needs to be a balanced deal where some of the good policies go out, but some of the bad policies go out as well.”

Under the program, Citizens would provide loans to companies that meet financial requirements, with the size of the loan contingent on the amount of risk they take on. The risk would be determined by the amount of premium paid into the Florida Hurricane Catastrophe Fund for each policy. Citizens staff members said tying the loans to the Cat Fund calculation would entice companies to take on more risk and prevent “cherry picking” safer, more inland policies. The loan would be paid off over 20 years.

The state-run company is the largest property insurer in the state with 1.4 million policies, and Gov. Rick Scott and some fellow Republican lawmakers have urged Citizens’ board members to find ways to reduce its policy count, thereby reducing its exposure and the potential for assessments on non-Citizens customers after a large hurricane or series of storms.

Other lawmakers, including some Republicans, have fought against those efforts inside the Legislature and out, defeating a bill this year that would have allowed out-of-state companies to take over Citizens policies. They also criticized measures that have reduced coverage of secondary structures and imposed a rigorous inspection program on wind mitigation credits that usually have resulted in a reduction in credit and an increase in premium.

Rep. Frank Artiles, R-Miami, continued that fight Thursday, reading a letter to the committee that will be sent Friday, admonishing them for planning to loan out funds from their surplus and using a “rushed” process to do so. He also questioned whether Citizens has statutory authority to lend money.

“Who gave the authority to Citizens to use that financial matrix? Isn’t that the job of (the Office of Insurance Regulation) and the Legislature?” Artiles said. “The issue is that it was not businesslike and it was not vetted properly.”

As the committee discussed the new depopulation program, the Office of Insurance Regulation announced that the old depopulation program, which does not have monetary incentives for private companies, was finally meeting with some success after a period of tepid results.

Four private companies - Florida Peninsula Insurance Co., Homeowners Choice Property & Casualty Insurance Co., Southern Fidelity Property and Casualty and Southern Oak Insurance Co. -- will take over 150,000 Citizens policies starting Nov. 6. OIR also stated that four other companies were prepared to take out more than 181,000 policies should Citizens approve the surplus note loan program.

But even after the full Citizens board votes Friday to move forward with the program, the final details would have to be hammered out and be voted upon before its next scheduled meeting in December. Lacasa is particularly concerned about the 2 percent variable rate interest that Citizens would charge. However, he agrees with the plan in principle as a means to reduce the gap in Citizens’ rates, which are held artificially low in high-risk areas because of a cap on rate increases set by the Legislature, and the rates private companies charge.

“I have no problem supporting a plan that makes up for that rate gap with our own surplus because at the end of the day, all of our other losses ... will be covered by their capital, not ours. I think that’s a fair deal," Lacasa said. "The devil’s in the details. How do you document it? How do you oversee it? How do you enforce it?”