Florida House passes bill modernizing surplus lines marketplace
Surplus lines provide coverage for enterprises that come with higher risks, such as tourism and entertainment, construction, research and innovation.
The Florida House of Representatives recently demonstrated its strong support of a bill that will modernize the insurance market for Florida’s surplus lines and specialty insurers.
The state legislature voted 112-1 on March 27 to approve House Bill 387, by Rep. Colleen Burton (R-Lakeland). The bill has now been sent to the Senate, which is considering its own version.
Senate Bill 538, authored by Senator Jeff Brandes (R-St. Petersburg), would also make important updates to the regulatory framework for Florida’s surplus lines insurance industry. Surplus lines provide coverage for enterprises that often come with higher risks, such as tourism and entertainment, construction, research and innovation and job creation. These risks are often declined by admitted carriers as the risk profile may not meet underwriting standards.
Good for large and small businesses
The Florida Surplus Lines Association (FSLA) says this legislation is a welcome sight for an industry supporting opportunities and insuring risks behind the scenes for large and small business owners across Florida.
“Surplus lines insurance is a safety valve for some of the most exciting and economically beneficial businesses in our state, yet it has been operating under 1980s-style regulations,” said FSLA President Erin O’Leary of Shelly, Middlebrooks & O’Leary, Inc. in Jacksonville, Florida. “We’re grateful to see lawmakers prioritizing updates that will increase efficiency and reduce unnecessary regulatory burdens.”
The details
According to an analysis by FLSA, Senate Bill 538 and House Bill 387 is intended to do the following:
Remove the prescriptive statutory capped fee and replace the cap with a requirement that the fee be reasonable. The fee must be separately stated before policy purchase so that the retail agent and the customer can see it clearly, and use that information to shop and find the most competitive terms to address their clients’ unique risks.
Remove an outdated regulatory paperwork requirement that technology replaced.
Ensure that Florida’s private flood market will continue to offer additional options for the millions of households without this important coverage.
The bill’s Senate companion, SB 538, passed from the Senate Banking & Insurance Committee on March 11. It is assigned and must be voted on in both the Senate Appropriations Subcommittee on Agriculture, Environment, and General Government and the Senate Appropriations Committee prior to a floor vote.
“WSIA is pleased to partner with the Florida Surplus Lines Association on this initiative to modernize Florida surplus lines statutes. We thank the House of Representatives for their support of HB 387 and look forward to passage of similar legislation by the Senate,” said Brady Kelley, Wholesale & Specialty Insurance Association (WSIA) Executive Director. “Surplus lines insurance is important to the health of Florida’s economy, and these updates will help ensure the market’s ongoing strength in the state.”
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