Proposed Senate Bill 1028: Transitioning Florida Policyholders to Private Insurance

Sarasota Republican Senator Joe Gruters has proposed Senate Bill 1028, aiming to shift policyholders from Florida's Citizens Property Insurance Corporation to private carriers, potentially resulting in higher premiums. This legislation focuses on reducing Citizens, Florida's insurer of last resort, by transitioning eligible policyholders into the private sector, highlighting the ongoing concern over Citizens' growth and taxpayer exposure following major weather events.

To address industry concerns, the bill mandates the creation of personal and commercial lines clearinghouses by January 1, 2027. These clearinghouses will assess the eligibility of policyholders to transition into private market solutions, emphasizing regulatory compliance requirements. Under SB 1028, Citizens must charge certain commercial policyholders a higher premium if the private market offers comparable coverage, impacting new policies and renewals.

Moreover, the proposed regulatory changes redefine eligibility standards, requiring policyholders to explore private offers through the state's surplus lines clearinghouse. By 2028, Citizens must develop protocols to transition applicants and current policyholders who no longer meet eligibility criteria to private insurers. If private market offers are priced within specific statutory limits, policyholders may face decisions between private insurance and remaining with Citizens, underlining the intricacies of underwriting and risk management within the insurance sector.