Florida has formally repealed its “diligent effort” requirements for placing insurance in the surplus lines market, a move supporters say will ease access to coverage and streamline the placement process.
Gov. Ron DeSantis signed the legislation into law on June 13. Under the previous rules, agents had to obtain rejections from at least three admitted insurers before turning to surplus lines providers, or one rejection for residential properties with replacement costs of $700,000 or more.
The new law, which takes effect July 1, eliminates that requirement but includes new consumer disclosure measures. These require that policyholders be informed surplus lines rates and forms are not approved by Florida regulators.
The Florida Surplus Lines Service Office welcomed the change, saying it will widen consumer options, eliminate redundant paperwork and accelerate access to alternative insurance options.
Virginia J. Clancy, president of the Florida Surplus Lines Association and vice president and chief underwriting officer at TAPCO Underwriters Inc., described the old rules as largely a paperwork issue that was difficult to enforce.
“The surplus lines market is a safety valve, not a substitute, for the admitted market, and risks that can be appropriately serviced in the admitted market have, and will continue, to be serviced there,” Clancy said in a statement. “We do not expect that to change, as existing market forces appropriately incentivize the placement of risk in the admitted market when possible and practicable.”
Florida’s surplus lines market has grown sharply in recent years, with direct premiums written increasing 41.3% between 2022 and 2024, according to a Best’s Special Report. The strongest growth has been observed in lines such as property, commercial automobile and general liability – sectors that continue to challenge the broader property/casualty market.
The report also noted that surplus lines providers are well-positioned to adapt to shifting market conditions. Premiums collected from the home insurance segment have doubled in the past six years.
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