Joe Gruters’ Citizens Insurance overhaul clears final Senate Committee

A proposal by Sarasota Sen. Joe Gruters to shrink Citizens Property Insurance Corporation has cleared its final Senate Committee stop, advancing to the Senate floor efforts to reduce taxpayer exposure tied to Florida’s property insurance market.

SB 1028 would make it harder for commercial property owners to stay in Citizens if a private insurance option exists — even if that option is up to 20% more expensive — by requiring policies to be routed through a commercial lines clearinghouse before the state-backed insurer can issue or renew coverage.

Doral Republican Sen. Ana Maria Rodriguez presented the bill on behalf of Gruters. She told Committee members the measure builds on recent reforms aimed at stabilizing Florida’s insurance market and reducing taxpayer exposure.

“I think the state of Florida, the Legislature particularly, has taken big strides in improving the insurance climate and the insurance market here in Florida,” Rodriguez said. “We’re seeing it year after year, the market is just getting healthier, and I think this is just one more step in that direction to continue making Florida an attractive market.”

Under the bill, approved surplus lines insurers could make offers on commercial residential and commercial nonresidential risks before Citizens binds or renews coverage. If a private-market offer is no more than 20% higher than Citizens’ total cost of coverage, policyholders who choose to remain with Citizens would still be required to pay the difference. 

A strike-all amendment approved Thursday revised the bill’s framework. Rodriguez said the amendment mandates the creation of an admitted clearinghouse by changing statutory language from “may create” to “shall create,” establishes clear sequencing of policy submissions to ensure admitted carriers receive priority, clarifies the scope of the Office of Insurance Regulation’s (OIR) oversight authority, and prohibits the use of public funds for the creation or operation of the clearinghouse.

“It enhances OIR’s authority by granting reasonable controlling measures and safeguards necessary for effective oversight and intervention when needed,” Rodriguez said. 

Citizens Property Insurance Legislative Affairs Manager Michael Wickersheim told Committee members the corporation is not taking a formal position on the bill but expressed concern about potential unintended consequences.

He warned that any disruption of the personal lines clearinghouse, which applies to homeowners policies, could have an adverse effect — even though the commercial clearinghouse could further reduce Citizens’ commercial exposure.

“It is written in a way where we’re concerned it might interact with our currently very successful personal lines clearinghouse,” Wickersham said. “That has been a large part of the stool where we have had success reducing our size, so we are concerned.”

The bill is a continuation of broader insurance reforms aimed at stabilizing the market and limiting the potential for future assessments on policyholders. Bradenton Republican Sen. Jim Boyd pointed to prior assessments levied against policyholders following past shortfalls and argued that reducing overall exposure at Citizens is a legislative responsibility.

“The assessment was originally implemented in 2007 to cover a $1.7 billion shortfall resulting from the 2004 and 2005 hurricane seasons, and I think that’s precisely why this bill is before us today,” Boyd said. “Citizens is a market of last resort and should be, I fully support there being a market in Florida for those that can’t find insurance somewhere else.”

The Fiscal Policy Committee voted Thursday to advance SB 1028 to the full Senate for consideration. A similar bill (HB 943) filed by Miami Republican Rep. Mike Redondo has cleared the first of three House Committees. If approved by the Legislature and signed by the Governor, the legislation would go into effect immediately upon becoming law.