Florida Gov. Ron DeSantis signed a bill that would create a commercial clearinghouse for Citizens Property Insurance policies, with many brokers and agents calling the bill “unnecessary” and nothing more than appeasement to a major brokerage firm.
Senate Bill 1028A bill pushed this spring by state Sen. Joe Gruters would now require citizens to set up a clearing house, which would ostensibly make it easier to reduce the commercial arm of the government-created insurance company of last resort.
The bill passed in March, and it’s unclear whether DeSantis will support it. But the agreement quietly took effect this week after he signed it. The measure states that surplus insurance companies should be considered for insuring citizens as long as they have a strong financial strength rating.
“For commercial residential and commercial nonresidential risks submitted through a commercial lines clearinghouse under § 627.3518, if an approved surplus lines clearinghouse insurer offers similar coverage as defined in § 627.3518(1) and the total cost of insurance for the specific risk does not exceed 15 percent of the total cost of insurance for the specific risk to the company, the corporation shall not issue new insurance unless otherwise provided in § 627.3518. 627.3518(10),” the bill reads.
The measure explains that the term “total cost of insurance for a particular risk” means the total annual premium, plus all fees, taxes, assessments, surcharges and any other mandatory charges that the policyholder must pay to maintain coverage throughout the proposed policy period.
According to news reports, the legislation was pushed during the spring legislative session by Ryan Turner, the CEO of Big Brokerage America who has made significant contributions to Republican causes. Some lawmakers, lobbyists and insurance agents believe the bill was written primarily to put Ryan Turner in charge of the clearing house.
The final bill omits some key safeguards that Florida Insurance Commissioner Michael Yaworsky, some Florida attorneys and some lawmakers had called for, including a provision that would prohibit project managers from having conflicts of interest and require managers to be based in Florida.
Florida insurance agents have used the Citizens Residential Policy Clearinghouse for years to help policyholders switch to a major carrier. But agents and brokers say the commercial policy clearinghouse is expensive to set up and won’t be needed by 2026. Citizen’s total number of policies has dropped significantly due to the 2022 litigation reform law and multiple new insurance companies reviving the Florida market.
Citizens’ policies in force have fallen from a recent high of 1.4 million in 2023 to a record low of less than 294,000 in May of this year, according to Citizens. The number of commercial and commercial residential policies has dropped from about 21,000 in 2023 to less than 6,000 this spring. As of the end of May, the number of commercial non-residential units was approximately 2,727.
The bill says the Florida Office of Insurance Regulation now has three months to review the commercial clearinghouse program.
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