Quick answer: Florida’s SB 1028 (Chapter 2026-150), signed in June 2026, requires new and renewing commercial applicants to Citizens Property Insurance to go through an admitted-market clearinghouse and then a surplus lines clearinghouse before Citizens can quote or bind, with the requirement scheduled for January 1, 2027. If an approved private carrier offers comparable coverage within the law’s price test, the business may no longer be eligible for Citizens. Commercial property owners, condo associations, and landlords should review their program now.
What Is the Citizens Commercial Clearinghouse?
Citizens Property Insurance Corporation is Florida’s state-backed insurer of last resort. Under the new law, as summarized by ResourcePro, Citizens’ clearinghouse program is restructured into three parts: personal lines, admitted commercial lines, and a new surplus lines commercial clearinghouse. By January 1, 2027, commercial residential and nonresidential applications must move through the admitted clearinghouse first, then the surplus lines clearinghouse.
The 15% Price Test Explained
A business becomes ineligible for Citizens coverage if an admitted insurer offers comparable coverage at or below the eligibility threshold, or if an approved surplus lines insurer offers comparable coverage priced no more than 15% above Citizens’ total cost of coverage. Local reporting adds that participating surplus lines carriers need an A- rating from A.M. Best. The Florida Senate vote was 33-1 and the House vote was 88-19.
In plain terms, you may be pushed toward a private carrier even if its quote is somewhat more expensive than Citizens. Details such as how “comparable coverage” is measured will be set through the program the Office of Insurance Regulation approves, so expect refinements before 2027.
Why Florida Is Doing This
Lawmakers want to shrink Citizens’ exposure so a major hurricane is less likely to trigger assessments on the broader market. The same reporting notes surplus lines carriers covered roughly 778,000 Florida policies as of May 31, including about 147,500 commercial property policies, while Citizens had fewer than 300,000 policies. The Insurance Commissioner initially opposed the bill over oversight of surplus lines carriers, then dropped his opposition after the Office of Insurance Regulation gained more power to vet applicants.
What Surplus Lines Coverage Means for Your Business
Surplus lines policies are written by non-admitted carriers, and their rates and forms are largely not reviewed by the state. They are not backed by the Florida Insurance Guaranty Association the way admitted policies generally are, a point worth understanding as the market shifts. Read the form carefully for:
- Named storm and wind deductibles that may be a percentage of insured value.
- Roof age and condition limitations or actual cash value endorsements.
- Business interruption waiting periods and extra expense limits.
- Exclusions and conditions that differ from an admitted form.
A lower price is not the same as equal coverage. That is the core risk when a price test drives placement.
Practical Steps Before January 1, 2027
- Start renewal early. Begin marketing your commercial property and condo association program 90 to 120 days before expiration.
- Update valuations and roof data. Current replacement cost, roof age, and wind mitigation details improve quotes.
- Compare forms, not just premiums. Have your advisor line up deductibles, valuation basis, and business interruption terms side by side.
- Check A.M. Best ratings and carrier financial strength for any non-admitted proposal.
- Confirm lender and contract requirements, since mortgage and lease terms may specify carrier ratings or admitted status.
Connect This to the Bigger Market Picture
This change arrives as pricing softens. Our analysis of falling Florida commercial property rates and surplus lines capital explains why private carriers are competing for business Citizens once held. Condo boards should also read about SIRS reserves and association insurance, and our note on the end of the 1% insurance assessment covers another recent cost change. For a broader view, see our 2026 Florida commercial insurance trends.
Frequently Asked Questions
When does the Citizens commercial clearinghouse start?
The law took effect June 16, 2026, and new and renewing commercial applications are scheduled to go through the clearinghouses by January 1, 2027.
Does this apply to condo associations?
Yes. The law covers commercial residential and nonresidential risks insured by or applying to Citizens, which includes many condominium and homeowner associations.
What is the 15% rule?
An applicant is ineligible for Citizens if an approved surplus lines insurer offers comparable coverage priced no more than 15% above Citizens’ total cost of coverage.
Is surplus lines coverage worse than admitted coverage?
Not necessarily, but it is regulated differently and forms vary. Review coverage terms and carrier ratings, not only price.
What happens to my agent’s role?
The law protects agents’ ownership of expirations and sets commission floors tied to Citizens’ January 1, 2026 rates, according to ResourcePro’s summary.
Talk to a Florida Commercial Insurance Advisor
Highlight Risk Services helps Florida businesses compare programs, read the fine print, and plan renewals. Learn what we do or contact us to review your commercial property coverage before the clearinghouse takes effect.
This article is general information, not legal or insurance advice. Program details may change as regulators finalize rules; consult your insurance professional.