Florida lawmakers move closer to changes with state's insurer of last resort

A bill that could prevent Florida’s part-time residents from using the state’s property insurer of last resort for their vacation homes could be headed to the Senate floor after passing a key committee vote unanimously on Tuesday.

Senate Bill 1716, sponsored by state Sen. Jim Boyd, R-Bradenton, passed the Fiscal Policy Committee with a 19-0 vote. It would make changes to Florida’s Citizens Property Insurance Corporation’s eligibility requirements and would merge the corporation's revenues, assets, liability, losses, and expenses into one account.

Bill sponsor Boyd said during a Senate Committee on Banking and Insurance meeting in late January that the bill was designed to limit the impact on Florida.

"The overall goal is to limit the overall exposure to Florida from the Citizens’ large policy count that we had up at a high level at one point, we lessened it at another point, and now it's growing back again," Boyd said.

Boyd stated that the bill does several things, including allowing additional carriers to enter the Florida market to provide policies for properties not eligible for coverage from Citizens.

"The bill permits an eligible lines insurer under certain conditions, to take second homes out of Citizens Property Insurance Corporation, and those conditions that they must follow is the insurer must be A-rated or higher by AM Best, and the insurer must use a Florida resident surplus lines broker," Boyd explained.

The bill would mandate that an eligible surplus lines insurer who wants to participate in the Florida market after meeting those conditions has to file a plan with the Florida Office of Insurance Regulation.

There are currently between 45,000 and 60,000 policies with Citizens that are considered second homes by the corporation. The bill would make these homes ineligible for coverage by Citizens.

"The bill would make a non-primary residence ineligible to return to Citizens," Boyd said. "The bill also makes changes to facilitate the restructuring of Citizens into a single account later this year, which the Legislature authorized during the 2022 special session."

The bill would make conforming changes to Citizens' clearinghouse, needed because of new eligibility requirements for non-primary residences, while eliminating the prohibition that precluded Citizens from allowing a bond to be allowed during a bid process.

If the bill passes, Citizens would also be eligible to apply for patents and trademarks, which will provide protection for Citizens' intellectual property that they may have developed in-house.