Reconstructing the Florida Market – Bill by Bill

By Kenneth Tinkham

I was fortunate when I was 12 to travel to Italy and see Florence. Among other cities I also saw, Florence sticks out because of its magnificent architecture, including the famous cathedral, Santa Maria del Fiore, built in the 13th and 14th centuries.

It took over 140 years, including 16 years on the famed dome, to erect the cathedral – known as the Duomo. I have often thought there is a lesson to be learned from construction of the Duomo, which still stands today. Building something that lasts requires patience and takes time.

Now that we’ve turned the page on 2023 it is important to keep that lesson close at heart as we continue into 2024 working in the Florida property insurance market.

The Careful Rebuild of the Market

The industry in Florida has gone through and is starting to emerge from a time of incredible turmoil. Much-needed reforms were enacted by the state Legislature in 2022 and 2023 to lift the industry out of this period of turmoil, and the fruits of those legislative efforts are beginning to be seen.

Most notably, new capital is entering the Florida market and taking policies out of my company, Citizens Property Insurance Corporation , allowing us to start looking more like the insurer of last resort that the Legislature envisioned when it created Citizens. However, much like the building of the Duomo, the creation of a strong, thriving and sustained property insurance market will require patience and time.

Going forward, Florida property insurers’ in-force policies will be governed by the new statutory provisions eliminating one-way attorney fees in litigation with property insurers – a structure that had contributed to high and costly rates of litigation.

In addition to enticing more new capital to enter Florida, this change will ultimately improve the litigation experience for existing companies. As a result, more companies will look to Citizens for depopulation opportunities, and our book of business and overall footprint on the market will continue to decrease.

The Future (of) Assessment

For Citizens specifically, in early 2024, policies will begin renewing with Citizens’ forms that allow disputed claims to be arbitrated before the state’s Division of Administrative Hearings. Over time these reforms will improve Citizens’ litigation experience and reduce the risk that Citizens’ assessments will be required of Florida’s property owners.

Additionally, Citizens combined its three accounts into one account in early 2024, which enhances our overall capital position and further lowers the risk of assessments.

While there are still legal impediments that we and the industry face, the efforts taken since the special legislative session in December 2022 have laid the foundation for building a strong and lasting property insurance market in Florida.

It will take time, and we will need patience, but the changes to the legal landscape promise a bright future for the property insurance industry in Florida – our own Duomo, if you will.

Ken is the Vice President and Deputy General Counsel - Corporate Legal at Citizens Property Insurance Corporation