Florida Lawmakers Weighing Insurance Industry Changes

Florida legislative leaders, facing increasing pressure from the public and the press, this week pledged to investigate property insurers’ financial structures. And bills filed before the 2025 Legislature began this week also would require executive pay disclosure by carriers, along with other changes that could affect insurance agents and insureds.

Here’s a look at some of the issues Florida lawmakers are considering as they convene in Tallahassee.

Investigation on MGAs

Newly sworn House Speaker Danny Perez, R-Miami, on Tuesday announced an investigation into property insurance carriers’ relationships with their managing general agents and other affiliated companies. The call for House hearings came a week after the Tampa Bay Times and Miami Herald reported that a 2022 analysis by the Florida Office of Insurance Regulation, made available only after a two-year wait on a public records request, suggests that insurers had diverted billions to affiliate companies while claiming financial hardship from hurricanes and claims litigation.

It’s far from certain if the speaker’s probe will lead to new restrictions or new reporting requirements for Florida carriers and MGAs. It’s not the first time the issue has been raised.

Insurance agents and industry advocates and lobbyists have pushed back on the news report and on the call for further investigations. Several have noted that the MGA arrangements that carriers employ already must be approved by OIR, and that it would be absurd for insurance holding companies to deliberately allow a carrier to sink into insolvency while diverting profits.

The Tampa Bay Times report “glides right by the comment that many affiliated companies poured back almost $700 million to the insurance companies in order to keep them from insolvency,” wrote Alan McGinnis, principal at McGinnis Himmel Insurance Agency in Tallahassee. His guest column was posted in Florida Politics and in insurance consultants recent blog posts.

Meanwhile, legislative changes enacted in recent years seem to be working, slowly but surely, bringing new capital and new carriers to the Florida market, with a slowing of rate increases.

Bills in the Hopper

Even without a House investigation on the table, insurance costs remain the number one concern for Florida homeowners, the Florida Association of Insurance Agents’ B.G. Murphy said in a recent webinar. At the same time, Florida business leaders and insurance executives and agents have urged lawmakers to steer clear of any changes to the 2022-2023 reforms that ended one-way attorney fees and disincentivized costly claims litigation.

The opposing sentiments have resulted in several bills that insurance interests are watching this year.

House Bill 643

HB 643, by Rep. John Snyder, R-Palm Beach, is considered a top priority for the FAIA. It would make it easier for agents to move commercial and commercial residential policyholders to surplus lines, and to sell Citizens Property Insurance Corp. policies. Agents would no longer be required to make a “diligent effort” to find coverage before obtaining surplus lines coverage.

“The diligent effort requirement serves no purpose,” Murphy said.

The bill also would soften the 2024 requirement that agents be appointed with at least three carriers before writing Citizens’ policies. Under HB 643, agents would be able to obtain a signed statement showing they have access to primary market carriers through a broker.

Senate Bill 230

Sponsored by Rep. Keith Truenow, R-Tavares, this omnibus-type bill would make a number of changes. For agents, it would reduce the number of pre-licensing education hours from 200 to 60 – a rule change that FAIA strongly opposes. That would “dumb down” the requirements for agents, something few people really want, FAIA’s Dave Newell said.

The measure, however, also would make it a little easier for insurers to avoid bad-faith claims, by further clarifying 2022 law that requires a court finding that the policy contract was breached, before extra-contractual damages can be demanded. It also would require plaintiffs to specify exact damage amounts demanded, and excludes attorney fees from damages. If insurers require more information from policyholders, that would have to be requested within a 60-day notice period, with 10-day extensions allowed.

It also would bar public adjusters from engaging in adversarial conduct with insurance adjusters, including recording insurer personnel. This has been an issue in recent years, with Citizens and other carriers charging that some public adjusters have physically threatened insurer claims workers, have video-recorded them and have taken other actions to thwart inspections.

SB 592 and HB 393

The bills would extend the popular My Safe Florida Condominium pilot program but would clarify that some detached buildings would not be eligible for the grants. It also would allow just 75% of unit owners to agree to apply for the program, not the current level of 100%. Only condo buildings of three stories or higher would be eligible.

For single-home mitigation measures, SB 1466 and HB 851 would set up a trust fund that would provide up to $300 million annually for the My Safe Florida Home program. It would allocate 5% of sales tax revenue generated from hurricane-impacted counties in the two months after a storm makes landfall.

SB 128

SB 128, by Sen. Danny Burgess, R-Zephyrhills, may get some attention since it appears to be consumer-friendly at a time of rising concerns about insurance corporation rates and practices. But it has led to some confusion in the industry.

The bill would require cancellation and nonrenewal notices be mailed and emailed at least 45 days before the termination date. But Florida law already requires 120-day notice for most nonrenewals and cancellations. SB 790 and HB 941 would bar insurers from cancelling policies for at least 90 days after repairs are made.

HB 705

The measure would exempt new Citizens policies from the glidepath, a statutory mechanism that limits Citizens’ rate increases each year. The change would be highly controversial but is considered free-market friendly.

Primary market insurance leaders and Citizens’ top brass have all called for an end to the glidepath, in order to allow the insurer of last resort to truly be an insurer of last resort and charge market rates or higher, which could encourage more competition. But Florida’s insurance commissioner and OIR recently slashed a proposed Citizens rate increase in half, keeping premiums for the carrier lower than other insurers in many areas of the state for 2025.

SB 554/HB551

State Sen. Don Gaetz was in the Florida Legislature for a number of years until he retired in 2016. Now he’s back, after being re-elected last fall. His bill, SB 554, would make a number of revisions that can be seen as consumer-friendly, but which insurers and agents say would unwind most of the 2022 litigation reforms.

The measure would repeal the 2022 ban on one-way attorney fees, replacing it with a sliding scale. It also would require more disclosure of insurer executive compensation packages.

SB 734/HB6017

The bills would allow non-dependent family members to file medical malpractice suits. Long an issue in Florida, the current “free kill” statute, as it’s known derisively, limits tort actions only to spouses or dependent children of people fatally injured in medical treatment. Critics, including the Florida Justice Reform Institute, insurance companies and medical providers, have said passage of the measures would greatly increase the number of lawsuits filed in the state.

Dozens of other bills have been filed this year, including one that would make Citizens the wind insurer for all of Florida. But many of those offers are not expected to see much traction. Because the weeks preceding the regular session were taken up with immigration bills, that left little time for committee action on insurance legislation, meaning lawmakers now have only about five weeks to move bills across the finish line, explained former deputy insurance commissioner Lisa Miller.

Top photo: The state Capitol building in Tallahassee (Adobe Stock images)

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