TALLAHASSEE – Continuing efforts to shrink state-owned Citizens Property Insurance Corp., the Florida House on Thursday gave final approval to a bill that could see at least some second homes moved from Citizens to the private insurance market.
The House unanimously passed the bill (HB 1503), which was approved by the Senate on Wednesday. It’s ready to go to Governor Ron DeSantis.
While the bill addresses a number of issues related to Citizensmuch of the focus was on a “depopulation” program designed to change policies from citizens to the private market. The program currently includes so-called “admitted” insurance carriers that face state regulation on issues such as rates.
The bill would open the depopulation program to “surplus line” carriers, which are not subject to the same regulations as admitted carriers and often insure risky properties. Under the bill, excess line carriers would be able to accept policies from residents for homes that do not have a property tax exemption.
An earlier version of the bill drew opposition because it would have allowed excess line carriers to accept policies for homes where people live less than nine months of the year. Critics said that could affect Floridians who live only part-time in the state — and result in them having coverage that lacks the regulatory protections of policies with admitted carriers.
But the Senate amended the bill to exempt residences with homestead exemptions from being taken over by surplus line carriers. Rep. Hillary Cassell, a Dania Beach Democrat who was a vocal opponent of the earlier version, supported the bill Thursday after the homestead change.
“At the end of the day, we all agree that we do need to take action and depopulate the Citizens, but it shouldn’t come at the expense of Floridians,” Cassel said. “I still don’t necessarily think excess lines are the best option because of some of the things I mentioned in the debate (on the earlier version) as far as the lack of oversight with OIR (the state Office of Insurance Regulation). But at the end of the day, this bill, this amendment, now protects Floridians from that and makes sure that people who have homestead property are not going to be able to be in this surplus line market.”
The bill, sponsored by Rep. Tiffany Esposito, R-Fort Myers, tries to build in some safeguards. For example, redundant line carriers will need to have financial stability ratings of at least A- from AM Best to participate in the depopulation program.
Citizens has grown over the past three years to become the state’s largest property insurer as private carriers shed customers and raised rates due to financial problems. Citizens had 1.171 million policies as of last week, according to data on its website.
It reached 1.412 million policies in the fall of 2023 before seeing a decline due to the depopulation program. But state leaders have long argued it should be significantly smaller, at least in part because of financial risks if a major hurricane or multiple hurricanes hit the state.
However, proposals have been filed for this year’s legislative session that could add policies to citizens. Those proposals include allowing residents with homes valued at more than $700,000 to get Citizens coverage.
Citizens are prohibited from selling policies on homes with a “home replacement value” of $700,000 or more, except in Miami-Dade and Monroe counties, where the limit is $1 million. With the legislative session scheduled to end Friday, proposals that could have changed the $700,000 limit in other parts of the state likely won’t pass.
