Florida’s plan to narrow eligibility for the state-backed insurer of last resort is expected to push some commercial property risks back into the private insurance market, according to at least one property specialist.
The shift, tied to proposed reforms in Florida, could significantly reshape how commercial property risks are placed in the state. Sean Lorey (pictured), vice president and property broker at Jencap, said wholesale brokers and their retail partners are already preparing for a surge in submissions if the changes proceed as expected.
“We are certainly preparing for an increased submission flow that will come with this piece of legislation,” Lorey told Insurance Business. “For us, that means beefing up our internal teams and making sure we have what’s in place to handle that increased volume.”
The reforms are part of a broader effort by Florida policymakers to restore Citizens Property Insurance Corporation to its original purpose as a “market of last resort,” rather than a competitive alternative to private insurers.
Citizens expanded rapidly during the recent property insurance crisis as private insurers raised rates or withdrew capacity following several costly hurricane seasons. By 2023, Citizens had become the largest property insurer in the state, with more than 1.4 million policies on its books, according to state data.
Florida regulators have since pushed aggressive “depopulation” efforts, encouraging private carriers to assume policies from Citizens to reduce the state’s exposure to catastrophic losses.
The latest legislative effort aims to tighten eligibility rules and require policyholders to move to private coverage if a comparable offer is available within a defined pricing threshold, reported to be about 15% above Citizens’ premium.
Lorey said the narrowing of that price gap is already occurring as the commercial property market softens. “Outside of the hardest-to-place accounts, we are seeing private market premiums already at or very close to Citizens premium levels,” he said.
Among commercial risks, residential condominium associations are expected to see the greatest impact from the changes. Citizens maintains a significant book of condominium association coverage, a specialized segment that grew as private insurers retreated from coastal wind exposure.
Lorey estimates Citizens’ commercial property portfolio could represent roughly $50 billion to $60 billion in total insured value, with condo associations accounting for the majority. However, he noted that moving risks into the private market will not necessarily be negative for policyholders, particularly as insurers regain appetite for better-performing accounts.
Private insurers are increasingly willing to compete for properties with stronger risk profiles, such as newer construction or locations farther from the coast. Older buildings, properties built with weaker materials, or those located in high-wind coastal zones may still struggle to find affordable coverage outside Citizens.
One area that has caused confusion among agents is the role of the Citizens clearinghouse system.
The clearinghouse acts as a review mechanism when policyholders seek coverage through Citizens, allowing private insurers to claim risks if they can offer comparable coverage.
But Lorey emphasized that the clearinghouse does not apply when brokers place risks directly in the private or E&S markets.
“If you want to remain with Citizens or obtain terms from Citizens, it goes through the clearinghouse,” he said. “But it does not require any clearinghouse involvement to be placed in the private or E&S market.”
Even as admitted insurers begin returning to harder-to-place risks, brokers say the excess and surplus (E&S) market will remain a critical component of Florida’s insurance landscape.
“Admitted carriers are dipping their toes into more difficult business and coastal risks,” Lorey said. “But there will always be a place for the E&S market.”
The segment continues to provide capacity for properties with complex exposures, including coastal wind risk and hazardous operations that traditional insurers often avoid.
The E&S market, which operates outside standard regulatory rate controls, has played a major role in stabilizing coverage during the state’s property insurance crisis, allowing brokers to build layered programs for difficult accounts.
Although the reforms are still moving through the legislative process, brokers expect the earliest operational impact to appear around the January 1, 2027 renewal cycle. The transition could trigger a wave of remarketing activity across Florida’s commercial property sector as brokers evaluate alternatives for policies currently written through Citizens.
Lorey urged agents to begin preparing well in advance to avoid last-minute disruptions. “You don’t want to wait until the last minute and then find an exorbitant number of insureds rushing to find Citizens replacements,” he said.
If the legislation proceeds as expected, the shift may represent one of the most significant structural changes in Florida’s property insurance market since the state began large-scale depopulation efforts more than a decade ago.
For wholesalers like Jencap, the coming shift is both a logistical challenge and a strategic opportunity. “The volume shift will be meaningful,” Lorey said. “We’re expecting a real surge in the Florida commercial space as these accounts transition.”
