They are called surplus-line companies, including Lloyd’s of London
Florida lawmakers seem to be moving closer to allowing more insurance companies to make offers to Citizens’ homeowner policyholders of vacation and second homes.
SB 1716 this week cleared the Senate’s Fiscal Policy Committee for the takeout offers.
Earlier this month the Senate’s Banking and Insurance Committee approved the measure.
The bill would allow surplus line insurers to start making takeout offers to Citizens’ policyholders who have second and vacation homes.
Citizens has been involved for the last year with an effort to have private insurers make these offers to try to shed policies and its financial exposure to claims.
Surplus line insurers operate differently than traditional or admitted insurance companies in the state and they are regulated differently and are typically headquartered and domiciled outside of the United States.
The bulk of Citizens’ takeout offers are still with single-family homes in Florida. With houses and condos, those takeout offers can be refused if the offer is over 20% of what policyholders are currently paying with Citizens.
Mortgage rates continued their ascent this week, reaching a two-month high and flirting with seven percent yet again. The recent boomerang in rates has dampened already tentative homebuyer momentum approaching the spring, a historically busy season for homebuying. While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines.
