Gray Rohrer
Surplus lines insurance companies, carriers that face little regulation by the state compared to traditional insurers, could take over second homes in Citizens Property Insurance Corp. if a bill advancing in the Senate makes it into law.
The bill (SB 1716) received a rewrite before passing unanimously through the Senate Banking and Insurance Committee. Sen. Jim Boyd, a Bradenton Republican sponsoring the bill, said the aim is to reduce the policies in Citizens, a state-run company that can place assessments on all homeowners if a catastrophic storm wipes out its ability to pay claims.
“More access to the markets, I think, is better,” Boyd told reporters after the hearing.
Citizens has 1.23 million policies as of Dec. 31. Three years earlier it had 443,228 policies. A wave of devastating storms and a surge in lawsuits led to the bankruptcy of seven companies in an 18-month span, and other larger companies have pulled back from the Florida market, pushing up prices and leading to more reliance on Citizens to cover homes.
But surplus lines companies aren’t regulated by the state the way other admitted carriers are. They typically cover pricier homes in riskier coastal areas, their rates aren’t approved by the Office of Insurance Regulation (OIR) and customers can’t sue them in Florida if a dispute over a claim arises.
Under Boyd’s bill, a person with a second home covered by Citizens would have to move into a surplus lines company if that company’s plan is approved by OIR. However, if a homeowner’s insurance agent isn’t licensed with the company, they could opt out of the offer. The surplus lines companies must have a rating of “A” or better by A.M. Best and a risk program managed by a Florida surplus lines broker.
“If they’re offered a takeout and the OIR approves the plan, they don’t have a choice. But if their agent is not licensed with that carrier, they don’t have to go,” Boyd said.
The House version of the bill (HB 1503) hasn’t received a hearing in that chamber yet.
3 comments
Marvin M.
January 29, 2024 at 5:51 pm
“But surplus lines companies aren’t regulated by the state the way other admitted carriers are. They typically cover pricier homes in riskier coastal areas, their rates aren’t approved by the Office of Insurance Regulation (OIR) and customers can’t sue them in Florida if a dispute over a claim arises.”
So then – a tiny band-aid on a huge bleeding-out wound.
Not a fix at all. Not even close.
Try again, Florida Legislature/Governor!
Bob Brooks
January 29, 2024 at 7:23 pm
Florida, the land of Casey Anthony! Here we go. Republicans now own Florida and the insurance companies own them. This clown’s solution is pathetic. by the end of 2024, Florida will be finished by natural disasters etc. There will be an exodus out of this state that will exceed the Jews leaving Egypt. Remember this post.
Bill Pollard
January 29, 2024 at 10:06 pm
Another fine mess you’re getting us into!
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