What's Happening?
The Florida Office of Insurance Regulation (OIR) has expressed strong criticism of a recently approved bill by the Florida House Commerce Committee. The bill aims to establish a clearinghouse to facilitate the transfer of commercial policies from Citizens
Property Insurance Corp. to surplus lines carriers. Despite the bill's passage, OIR and some insurance brokers have raised concerns, labeling the improvements as 'illusory' and inconsistent with standard insurance regulation practices in Florida and the U.S. The bill, which includes a 'strike-all' amendment, has sparked controversy due to its provision allowing a program administrator to decide which insurers and brokers can participate, potentially favoring surplus lines carriers over admitted carriers. The total insured value of Citizens' commercial policies in Florida exceeds $25 billion, with significant stakes for insurance agents and brokers.
Why It's Important?
The bill's approval could significantly impact Florida's insurance landscape, particularly affecting the depopulation strategy of Citizens Property Insurance Corp. By potentially favoring surplus lines carriers, the bill may alter the competitive dynamics within the state's insurance market. This shift could lead to increased premiums for policyholders if Citizens is forced to adjust its rates to match those of surplus lines carriers. The controversy also highlights the influence of political contributions on legislative processes, as some brokers suggest the bill favors a large national broker with ties to Republican causes. The outcome of this legislative change could set a precedent for how insurance policies are managed and regulated in Florida, affecting stakeholders across the industry.
What's Next?
The bill is expected to be incorporated into the Senate version, SB 1028, which is scheduled for a floor vote soon. With the legislative session ending on March 13, there is limited time for further amendments or the inclusion of additional safeguards proposed by OIR. The ongoing debate may prompt further scrutiny from industry stakeholders and could lead to legal challenges if the bill is perceived to unfairly benefit certain parties. The outcome of this legislative process will be closely watched by insurance regulators, brokers, and policyholders, as it could have lasting implications for the state's insurance market.
