What's Happening?
Florida Governor Ron DeSantis has signed Senate Bill 1028, which mandates the creation of a commercial clearinghouse for Citizens Property Insurance policies. This bill, promoted by state Sen. Joe Gruters, aims to facilitate the depopulation of the commercial side
of Citizens, the state-created insurer of last resort. The bill allows surplus lines insurers to be considered for Citizens' takeouts, provided they have a strong financial strength rating. Critics, including several brokers and agents, have labeled the bill as unnecessary, suggesting it primarily benefits a major brokerage, Ryan Turner, whose CEO has contributed significantly to Republican causes. The bill passed with little fanfare and took effect immediately upon the governor's signature.
Why It's Important?
The signing of this bill is significant as it impacts the insurance landscape in Florida, particularly for commercial policies. By establishing a clearinghouse, the bill aims to reduce the number of policies held by Citizens, potentially affecting the availability and cost of insurance for businesses. Critics argue that the bill may lead to increased costs and complexity without providing substantial benefits, as Citizens' policy count has already decreased significantly due to previous reforms. The bill's passage highlights ongoing debates about the role of state-backed insurers and the influence of political contributions on legislative decisions.
What's Next?
The Florida Office of Insurance Regulation has three months to review the commercial clearinghouse program as stipulated by the bill. Stakeholders, including insurance agents and brokers, may continue to express concerns about the bill's implementation and its impact on the market. The effectiveness of the clearinghouse in reducing Citizens' policy count and its influence on the broader insurance market will be closely monitored. Additionally, there may be further discussions about potential amendments to address the concerns raised by critics.
