Commercial insurance clearinghouse bill aims to boost competition, lower costs

Florida’s insurance market is never boring.

After years of losses from major hurricanes, we got to catch our breath last year thanks to a quiet hurricane season. However, that quiet year now has Floridians bracing for what might lie ahead as we head into the 2026 Hurricane Season. Our insurance industry is watching too — and we are thankful that new competition and consumer choice are on the way, thanks to SB 1028, passed by the Legislature this Session.

Part of living in a state with frequent hurricanes and other natural disasters is having an insurer of last resort, which is ultimately taxpayer-backed. In Florida, that government-backed insurer is Citizens. Citizens has previously incurred major hurricane-related deficits that were backstopped through a combination of budget appropriations and broad-based statewide assessments on policyholders. SB 1028 is needed to address these shortfalls and curb future volatility in Florida’s unique insurance market.

SB 1028, known as the Commercial Insurance Clearinghouse bill, updates Florida’s commercial insurance market and requires Citizens to set up a Clearinghouse that will give consumers more policy options. If Gov. Ron DeSantis signs it into law, this bill will improve the current system, which often moves commercial insurance policies for places like shopping malls, golf courses, hotels, and condos into a government-backed program too quickly. This bill only affects commercial insurance and does not impact personal homeowners’ policies.

A small but vocal group opposes this bill and seems to prefer government-backed insurance over market-based solutions to our insurance problems. This thinking is flawed. Government-backed insurance is meant to support the market when needed, not to be the main option.

SB 1028 will help the private market grow by encouraging competition. Right now, a commercial property owner only has to ask one private insurer for coverage and show that the price is not within 20% of Citizens’ premiums to qualify for Citizens coverage. These rules make it easy for commercial property owners to choose Citizens.

Conversely, homeowners are required to seek coverage and obtain at least three quotes from different private insurers, and, after that, to go through a personal insurance lines clearinghouse before being deemed eligible for Citizens. If it works for homeowners, it will work for commercial property owners. Because SB 1028 establishes a framework for competition, commercial property owners should see lower property insurance rates almost immediately.

It’s a primary reason this bill drew such overwhelming bipartisan support. The bill should lower insurance costs and preserve and enhance consumer protections. All offers through the Commercial Clearinghouse must provide equal or better coverage than Citizens. This safeguard goes even beyond that required in the personal lines Clearinghouse.

With SB 1028, Florida’s Office of Insurance Regulation (OIR) will continue to oversee surplus lines insurers and wholesale brokers in the state. Citizens and the OIR will also set rules for surplus lines insurers in the Clearinghouse, and all standards, agreements, and contracts will be regulated by the OIR.

Simply put, Florida commercial consumers need more choices, not less, to help bring prices down. Florida TaxWatch has long advocated and supported policies that advance the free market and alleviate and protect Florida taxpayers. SB 1028, establishing a Commercial Insurance Clearinghouse, is a perfect example of legislation pursuing this goal.

We appreciate the Legislature’s hard work in this effort, and we encourage DeSantis to sign the bill.

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Former Lt. Gov. Jeff Kottkamp serves as president and CEO of Florida TaxWatch.