Florida Gov. Ron DeSantis has signed a bill that will create a commercial clearinghouse for Citizens Property Insurance policies, a bill that a number of brokers and agents have called “unnecessary” and little more than a sop to one major brokerage.
Senate Bill 1028, pushed this spring by state Sen. Joe Gruters, now requires Citizens to establish the clearinghouse, which ostensibly will make it easier to depopulate the commercial side of the state-created insurer of last resort.
The bill passed in March and it wasn’t clear if DeSantis would support it. But it took effect upon his signature this week with little fanfare. The measure notes that surplus lines insurers should be considered for Citizens’ takeouts, as long as they carry a strong financial strength rating.
“For commercial residential and commercial nonresidential risks submitted through the commercial lines clearinghouse pursuant to s. 627.3518, if an approved surplus lines clearinghouse insurer offers comparable coverage as defined in s. 627.3518(1) and the total cost of insurance coverage for the specific risk is not more than 15 percent greater than the corporation’s total cost of insurance coverage for the specific risk, the corporation may not issue new coverage unless otherwise provided in s. 627.3518(10),” the bill reads.
The term “total cost of insurance coverage for the specific risk” means the aggregate annual premium, plus all fees, taxes, assessments, surcharges, and any other mandatory charges that a policyholder must pay to maintain coverage for the entirety of the proposed policy period, the measure explains.
The legislation was promoted during the spring legislative session by Ryan Turner, the large U.S. brokerage whose CEO has contributed heavily to Republican causes, according to news reports. Several lawmakers, lobbyists and insurance agents argued that the bill was written largely to set Ryan Turner up to be in charge of the clearinghouse.
The final bill left out a few key safeguards that Florida Insurance Commissioner Michael Yaworsky, some Florida agents and a few lawmakers had called for, including a clause that would have barred the program manager from having conflicts of interest and would have required the administrator to be based in Florida.
Florida insurance agents for years have utilized a Citizens residential policy clearinghouse to help move policyholders to primary carriers. But agents and brokers have said a commercial policy clearinghouse will be expensive to set up and is unneeded in 2026. Citizens’ total policy count has already plummeted thanks to 2022 litigation-reform laws and multiple new insurers in the rejuvenated Florida market.
Citizens’ policies in force have dropped from a recent high of 1.4 million in 2023, to a record low of less than 294,000 by May of this year, Citizens’ data show. Commercial and commercial residential policy counts have fallen from about 21,000 in 2023 to less than 6,000 by this spring. Commercial nonresidential numbers stood at about 2,727 at the end of May.
The Florida Office of Insurance Regulation now has three months to review a commercial clearinghouse program, the bill reads.
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