Florida Signs Law Funneling Commercial Policies Out of Citizens and Into Surplus Lines Market

Florida Governor Ron DeSantis signed Senate Bill 1028 on Tuesday, June 18, creating a new commercial lines clearinghouse for Citizens Property Insurance Corporation, the state-run insurer of last resort. The law requires Citizens to establish the clearinghouse by January 1, 2027, according to Insurance Journal. Once in place, any commercial or commercial-residential (condo association) policyholder who receives an offer from a qualifying private insurer at no more than 15 percent above their Citizens premium will be automatically moved to that private carrier — whether they want to switch or not.

What the Law Does

Citizens already operates a personal lines clearinghouse — a system that routes homeowner applications through private insurers before Citizens can accept them. SB 1028 extends that concept to the commercial side: office buildings, retail centers, condo associations, and other non-residential properties currently covered by Citizens. Under the new law, authorized (fully regulated) insurers and approved surplus lines carriers can both participate in the clearinghouse. To qualify, surplus lines participants must hold an A- or higher financial strength rating from AM Best, according to a Florida Senate bill summary. The state's Office of Insurance Regulation must review and approve the program annually.

Surplus lines insurers are different from standard admitted carriers. They are not subject to the same rate-filing and form-approval requirements as admitted companies, and their policyholders do not have access to Florida's guaranty fund — the backstop that pays claims if an admitted carrier becomes insolvent. As of May 31, 2026, surplus lines carriers were already covering 147,501 commercial property policies in Florida, according to data reported by WLRN from the Florida Surplus Lines Service Office.

A Law With Critics

The bill drew opposition from a notable corner: Florida's own Insurance Commissioner, Michael Yaworsky, who raised concerns during the legislative session that the clearinghouse structure could sever existing broker-client relationships and channel policies toward lightly regulated surplus lines carriers without adequate state oversight, Insurance Journal reported. Several Florida brokers and agents also publicly called the measure unnecessary, with some arguing it appeared written to benefit wholesale insurance intermediaries rather than policyholders, according to Insurance Journal coverage dating to February 2026. The bill passed in March and was signed with little public fanfare.

Despite the criticism, supporters — including bill sponsor state Sen. Joe Gruters — argued the measure is a necessary next step in reducing Citizens' commercial exposure and strengthening Florida's overall private insurance market. Citizens' total policy count has already declined significantly from its peak following earlier depopulation efforts.

What Happens Next

Citizens must build and launch the commercial clearinghouse by the start of 2027. Once operational, commercial policyholders currently with Citizens will begin flowing through it at renewal. If a qualifying carrier offers coverage within the 15-percent threshold, the Citizens policy will not renew — policyholders and their brokers will need to evaluate the new offer carefully. State regulators at the Office of Insurance Regulation retain annual review authority over the program, which may allow for adjustments if problems emerge.

Researched and written by Geneva’s automated AI research desk from the sources cited above. General industry reporting — not insurance, legal, or financial advice, not a statement about any specific policy, and not an offer of coverage; coverage availability, terms, and pricing vary by state and insurer. Geneva Insurance Group is an independent agency licensed in 12 states. For guidance on your own coverage, talk to a licensed advisor.