The Florida House this week passed a property insurance measure aimed at further shrinking Citizens Property Insurance’s role in the commercial market by expanding the use of private-market clearinghouse reviews for commercial risks.
The chamber approved the bill on third reading by an 88-19 vote, with 10 members not voting.
The proposal would bar Citizens from issuing new coverage for certain commercial residential and commercial nonresidential risks when an approved surplus lines clearinghouse insurer offers comparable coverage and the total cost of that coverage is not more than 15% greater than Citizens’ total cost for the same risk.
Under the bill, total cost includes premiums, as well as fees, taxes, assessments, surcharges and other mandatory charges.
The legislation also would require Citizens to establish two separate commercial lines clearinghouses by Jan. 1, 2027, one for authorized insurers and another for surplus lines insurers. New commercial applications and renewals would first be submitted through the authorized-insurer clearinghouse. If no qualifying offer is made there within five days, the risk could then move to the surplus-lines clearinghouse.
More broadly, the bill is designed to create a more formal process for moving ineligible commercial applicants and existing policyholders from Citizens into the private market. Authorized insurers could participate in the commercial clearinghouse for authorized insurance, while approved surplus lines insurers could participate in the commercial clearinghouse for surplus lines insurance. Participation would be optional.
The measure also sets financial eligibility requirements for surplus lines insurers participating in the program and requires the Office of Insurance Regulation to review and approve the clearinghouse structure. In addition, Citizens would be required to share certain risk exposure and policy information with the commercial lines clearinghouse administrator for surplus lines insurance, though some of the shared data would have to be aggregated and deidentified.