Florida lawmakers are stepping up to address growing concerns about property insurance in the state. In early March, legislative leaders gathered in Tallahassee, responding to public pressure and media scrutiny. They committed to investigating the financial practices of property insurers, particularly their dealings with managing general agents (MGAs).
House Speaker Danny Perez announced this investigation, highlighting a report that suggested insurers may have funneled billions to affiliated companies while claiming financial struggles due to hurricanes and claims litigation. This inquiry aims to shed light on the relationships between insurers and MGAs, but it remains uncertain whether it will result in new regulations or reporting requirements.
Insurance agents and industry advocates have expressed skepticism about the need for further investigation, arguing that the arrangements with MGAs are already overseen by the Florida Office of Insurance Regulation (OIR). They contend that it would be illogical for insurance companies to allow their carriers to fail while diverting profits.
Recent legislative changes have started to show positive effects, slowly bringing new capital and carriers into the Florida market, which has led to a decline in rate increases.
Among the proposed bills is House Bill 643, a key initiative from Rep. John Snyder. This bill aims to simplify the process for insurance agents, allowing them to more easily transition commercial clients to surplus lines and sell policies from Citizens Property Insurance Corporation. Agents would no longer need to exhaust all options with primary carriers before seeking surplus lines coverage.
In addition, Senate Bill 230, sponsored by Rep. Keith Truenow, proposes several changes. It would reduce the pre-licensing education requirements for insurance agents from 200 hours to just 60, a move opposed by the Florida Association of Insurance Agents (FAIA), which believes it could lower professional standards. The bill also seeks to clarify laws regarding bad-faith claims and impose stricter rules on public adjusters.
Other bills, such as SB 592 and HB 393, aim to extend the My Safe Florida Condominium pilot program, making it easier for condo associations to apply for grants. These changes would allow a smaller percentage of unit owners to agree to participate, easing the process for many.
Senate Bill 128, introduced by Sen. Danny Burgess, seeks to improve consumer protections by requiring insurers to provide at least 45 days’ notice before cancelling or not renewing policies. However, this proposal has led to confusion, as existing laws already mandate a 120-day notice period.
Finally, House Bill 705 proposes to exempt new Citizens policies from the glidepath, a rule that limits annual rate increases. This change is contentious but aims to align Citizens with market rates, potentially enhancing competition in the insurance market.
As Florida lawmakers continue to address these pressing issues, the outcome of these discussions and proposed reforms will be closely watched by both consumers and industry stakeholders.