Citizens Property Insurance just got hit with its biggest legislative overhaul since 2022. Senate Bill 1028 — sponsored by Senator Joe Gruters, paired with House Bill 943 — carves out two separate clearinghouses (centralized matching systems where Citizens' policy data is shared with participating private carriers who submit takeout offers) meant to shove Citizens' remaining commercial property policies into the private market. One clearinghouse handles admitted carriers. The other handles surplus lines insurers. The bill cleared the Florida Senate 33-1 and the House 88-19, per the Florida Legislature (2026), and now it's sitting on Governor DeSantis' desk.
If signed, the clearinghouses must be operational by January 1, 2027.
Nobody picked that date randomly. Citizens is simultaneously requesting a 10.4% rate increase on its commercial lines for late 2026, per Citizens Property Insurance Corporation rate filings (2026). So picture this: commercial policyholders who've been riding Citizens' below-market rates suddenly face higher premiums from Citizens itself and a forced transition to a private carrier through the new clearinghouse mechanism. Double hit.
I run palmbeachcoverage.com — and honestly, my phone hasn't stopped ringing since this bill cleared committee. Palm Beach County commercial property owners, condo association board members, strip mall landlords along Military Trail — everyone wants straight answers. Here's what SB 1028 actually does, who it affects, why it sparked a fight with OIR, and what you need to handle before January.
What SB 1028 Does
Florida has used depopulation — the process of systematically moving policies from the state-backed insurer into the private market to reduce Citizens' catastrophic risk exposure — on personal residential policies since 2013. SB 1028 extends that same strategy to commercial policies. If you've watched how Citizens has been shrinking its personal lines book — from a peak of approximately 1.42 million policies in October 2023 down to fewer than 400,000 as of early 2026, per Citizens Property Insurance Corporation (2026) — same playbook, commercial side.
Two Separate Clearinghouses
Here's where it gets interesting. SB 1028 doesn't create one clearinghouse. It creates two, each operating under completely different rules:
| Feature | Admitted Carrier Clearinghouse | Surplus Lines Clearinghouse |
|---|---|---|
| Carrier type | Licensed, OIR-regulated insurers | Surplus lines (non-admitted) insurers |
| Rate regulation | Subject to OIR rate approval | Not subject to OIR rate filing |
| Premium threshold | Must offer comparable coverage | Offer must be within 120% of Citizens premium |
| Financial requirements | Standard OIR licensing | AM Best A- or better, financial size category A-VII+, 5+ years audited financials |
| Policyholder guarantee fund | Covered by FIGA | Not covered by FIGA |
Worth noting: the admitted carrier clearinghouse operates similarly to the existing personal lines depopulation process. Old news. The surplus lines clearinghouse? That's the new — and controversial — piece of this puzzle.
How It Fits Into Citizens' Depopulation Strategy
Citizens Property Insurance was never meant to be Florida's largest insurer. Full stop. It's the state-created insurer of last resort, established to provide coverage when the private market won't. Every policyholder on Citizens' books represents a potential assessment risk to every other insurance consumer in the state — meaning if Citizens can't cover a catastrophic loss event, all Florida policyholders pay surcharges (called assessments) to close the gap, as authorized under Florida Statute 627.351.
So why does that matter right now?
The personal lines clearinghouse, established under Florida Statute 627.3518, has been the primary engine behind Citizens' dramatic policy reduction over the past three years. SB 1028 now applies that same pressure to the approximately 6,180 commercial policies still on Citizens' books — roughly 2,837 commercial residential policies and 3,343 commercial nonresidential policies, per Citizens Property Insurance Corporation data (2025). Not a huge number. But concentrated risk, especially in coastal counties.
How the Commercial Clearinghouse Works
Once the clearinghouses go live, the mechanics are straightforward — at least on paper.
The Admitted Carrier Path
- Citizens shares its commercial policy data with participating admitted carriers
- Carriers review the policies and make takeout offers on the ones they want
- Policyholders receive notice of the offer and a comparison of coverage terms
- If the offer provides comparable coverage, the policy transfers to the private carrier
- Policyholder can opt out and remain with Citizens — but may face the equalization adjustment (more on that below)
Same playbook the personal lines clearinghouse has used since 2013.
The Surplus Lines Path
Now we're in new territory. For commercial policies that admitted carriers won't touch — typically higher-risk coastal properties, older buildings, or specialty operations — surplus lines carriers can participate through a separate clearinghouse.
The surplus lines clearinghouse comes with guardrails:
- Participating insurers must hold an AM Best rating — AM Best being the insurance industry's primary independent assessor of carrier financial strength — of A- or better with a financial size category of A-VII or higher, per SB 1028 bill text (2026)
- Five years of audited financial statements required
- The offer must fall within 120% of the Citizens premium — meaning if Citizens charges $50,000 for a commercial policy, the surplus lines carrier's offer cannot exceed $60,000
That 120% cap? Single most important number in this entire bill.
The 120% Premium Threshold and Equalization Adjustment
Two mechanisms work in tandem here to push commercial policyholders off Citizens. Understanding both is non-negotiable.
The 120% threshold determines eligibility. If a surplus lines carrier offers coverage within 120% of your Citizens premium, you are considered to have a "viable private market option." Citizens can then deem you ineligible for continued coverage. Think 120% sounds reasonable? Maybe — until you run the actual dollar math on a $200,000 commercial policy.
The equalization adjustment is the stick. Receive a qualifying clearinghouse offer — from either an admitted or surplus lines carrier — choose to stay with Citizens anyway, and you pay an equalization premium surcharge. This surcharge equals the difference between the Citizens premium and the clearinghouse offer, effectively killing any price advantage of staying put.
In practice:
| Scenario | Citizens Premium | Clearinghouse Offer | Equalization Surcharge | Total Cost to Stay with Citizens |
|---|---|---|---|---|
| Admitted carrier match | $40,000 | $45,000 | $5,000 | $45,000 |
| Surplus lines at 110% | $40,000 | $44,000 | $4,000 | $44,000 |
| Surplus lines at 120% | $40,000 | $48,000 | $8,000 | $48,000 |
| Surplus lines above 120% | $40,000 | $52,000 | $0 (offer doesn't qualify) | $40,000 |
The math is designed to make staying with Citizens pointless. You're shelling out the private market rate either way — the only question is whether you're getting Citizens' coverage or the private carrier's.
Before and After: What Changes for Commercial Policyholders
| Aspect | Before SB 1028 | After SB 1028 (if enacted) |
|---|---|---|
| Commercial depopulation mechanism | None — only personal lines had a clearinghouse | Two clearinghouses: admitted + surplus lines |
| Surplus lines participation | Not part of any depopulation program | Can make takeout offers through dedicated clearinghouse |
| Premium threshold for surplus | N/A | Offer must be within 120% of Citizens premium |
| Opt-out consequence | Stay with Citizens at Citizens rates | Equalization adjustment — pay the difference |
| Insurer financial standards | N/A for commercial depopulation | AM Best A-, A-VII, 5 years audited financials |
| FIGA coverage if surplus carrier fails | N/A | No — surplus lines not covered by guarantee fund |
| Implementation deadline | N/A | Clearinghouses operational by January 1, 2027 |
Who This Affects in Palm Beach County
Palm Beach County leans on Citizens for commercial coverage more than most counties — and I see it firsthand. Last month I sat with a property manager in Lake Worth who oversees eleven commercial buildings, seven of them on Citizens. He had no idea this bill existed. Walk down West Palm Beach's Clematis Street retail corridor to Boca Raton's mixed-use developments along Federal Highway, Delray Beach's Atlantic Avenue storefronts, and Jupiter's waterfront marina properties, the county's coastal exposure, aging building stock, and concentration of condo associations are exactly the risk profile private carriers have been avoiding.
Commercial policyholders most likely to receive clearinghouse offers include:
- Condo and homeowner associations with master policies on Citizens (the largest single category of Citizens commercial policies statewide)
- Coastal commercial properties in high-wind zones — think A1A storefronts, marina-adjacent buildings, oceanfront hotels
- Older commercial buildings that haven't been retrofitted with hurricane-hardening improvements
- Mixed-use properties combining residential and commercial space
If your commercial property sits on Citizens and you haven't looked at the private market recently, the clearinghouse will do that comparison for you — on terms you didn't choose. I'd rather be the one setting those terms. Wouldn't you?
For condo associations, this stacks on top of the structural inspection and reserve requirements that have been squeezing building budgets since the Champlain Towers reforms. Insurance transition plus reserve funding obligations at the same time? That's a cash flow crisis waiting to happen — (and I've been fielding these calls since the bill cleared committee). If you're a board member, your fiduciary duty demands you start planning for this scenario now. Not in December.
Why the OIR Pushed Back
Florida's insurance regulator didn't let SB 1028 sail through quietly.
Insurance Commissioner Michael Yaworsky submitted testimony calling several of the bill's provisions "illusory," per Florida Office of Insurance Regulation legislative testimony (2026). That word — illusory — kinda tells you everything about OIR's posture here.
The "Illusory" Argument
Yaworsky's core concern boils down to this: the surplus lines clearinghouse creates the appearance of private market options without delivering the substance. Surplus lines carriers aren't regulated by OIR. They aren't required to file rates for approval. And they aren't backed by the Florida Insurance Guaranty Association (FIGA — the state fund that pays policyholders' claims when an admitted insurer becomes insolvent) if they go insolvent. A commercial policyholder forced off Citizens and onto a surplus lines carrier loses the regulatory safety net entirely.
So what happens when your carrier goes belly up and FIGA can't help? You're on your own.
The Commissioner's position was that the admitted carrier clearinghouse alone would be sufficient — the surplus lines component introduces risk to policyholders without proportional consumer protection. Yaworsky's concerns here mirror his advocacy on AI-driven claims regulation, where he's pushed for human oversight and disclosure requirements — a consistent posture of demanding substantive consumer safeguards over cosmetic ones.
The Fee Cap Question
OIR also raised concerns about policyholder fees in the clearinghouse process. The Commissioner advocated for a $100-per-policy fee cap on clearinghouse transaction costs. Final bill language? Leaves fee structures to be established through the implementation process, which critics argue gives too much discretion to the clearinghouse administrators. That ambiguity trips people up.
The Market Concentration Question
Arguably the most politically charged aspect of SB 1028 has nothing to do with insurance mechanics at all. Multiple industry observers and Florida media outlets have noted that the bill's surplus lines clearinghouse structure could disproportionately benefit a small number of wholesale brokerages — specifically RT Specialty, the wholesale brokerage arm of Ryan Specialty, one of the largest surplus lines intermediaries in the country, per Insurance Journal and Florida Politics (2026).
The concern is straightforward: the surplus lines market operates through wholesale brokers who place policies with non-admitted carriers. If the clearinghouse funnels Citizens' commercial book through surplus lines, the brokerages controlling those placement relationships stand to capture significant fee revenue on thousands of policies simultaneously. Concentrated benefit.
Supporters of the bill argue the concern is overblown — the financial qualification requirements (AM Best A-, A-VII, five-year audit history) ensure only well-capitalized insurers participate, and competition among surplus lines carriers should keep pricing disciplined. We'll see. January 2027 will answer that question one way or the other.
Key Dates and Deadlines
| Date | Event | Action Required |
|---|---|---|
| March 2026 | SB 1028 passed both chambers | Monitor Governor's signature |
| July 1, 2026 | Anticipated effective date (if signed) | Review current Citizens commercial policy terms |
| Late 2026 | Citizens 10.4% commercial rate increase takes effect | Compare Citizens renewal vs. private market quotes |
| January 1, 2027 | Clearinghouses must be operational | First clearinghouse offers could arrive |
| Q1 2027 | First takeout cycle expected | Decision deadline — accept offer or face equalization adjustment |
Six months. That's the gap between July 2026 (effective date) and January 2027 (operational deadline). It'll go fast.
What Personal Lines Policyholders Should Know
If you're a homeowner on Citizens — not a commercial policyholder — SB 1028 doesn't change your clearinghouse exposure directly. The personal lines clearinghouse has been running since 2013 and is a separate mechanism under Florida Statute 627.3518.
That said, the same depopulation pressure that's moved Citizens from 1.42 million total policies down to fewer than 400,000 is still active on the personal lines side. Palm Beach County homeowners on Citizens face identical dynamics: understand your hurricane deductible structure, make sure your flood coverage is active and adequate (since Citizens doesn't bundle flood), and consider whether a wind mitigation inspection could help you qualify for better private market rates when your own clearinghouse offer arrives.
Roof concerns compound things further. For homeowners dealing with roof-age-related coverage issues on top of depopulation pressure, the recently filed HB 815 roof age protections are worth understanding — particularly if your transition to a private carrier triggers new underwriting scrutiny on your roof.
Haven't started your pre-hurricane-season insurance review? Consider this your nudge. Any policy transition — voluntary or clearinghouse-driven — takes time to process, and you don't want to be mid-transition when a storm enters the Gulf.
What Commercial Policyholders Should Do Now
Don't wait for the clearinghouse to tell you what your options cost. The ball is in your court — for now.
Before July 2026:
- Pull your current Citizens commercial policy declarations page. Know exactly what you're covered for, your premium, your deductibles, and your policy term dates.
- Request quotes from at least two admitted carriers and one surplus lines broker for comparable coverage. You want to know the spread before the clearinghouse sets the terms.
- If you're a condo association, schedule a board meeting specifically to discuss insurance transition planning. Your membership deserves transparency about what's coming.
Before January 2027:
- If your Citizens renewal falls in Q4 2026, you'll likely be renewing just before the clearinghouse goes live. Consider whether locking in a private market policy now — on your terms — beats waiting for a clearinghouse offer you didn't negotiate.
- Review your property's risk profile. Hurricane-hardening improvements, updated building inspections, and documented maintenance histories all improve your positioning with private carriers.
- Engage an independent commercial insurance broker (not captive to a single carrier) who can represent you across both admitted and surplus lines markets.
I had a client last fall — condo association near Singer Island, 1987 construction, Citizens policy at $86,000 annually — who proactively went to market and locked in admitted coverage at $94,000 before any depopulation pressure hit. Smart move. When the clearinghouse offer comes in at $103,200 (that's the 120% ceiling), they're already positioned with a better deal they chose themselves.
If you need help benchmarking your current Citizens commercial coverage against private market alternatives, request a free Citizens policy review. We'll walk through your declarations page, identify coverage gaps, and provide comparison quotes — before the clearinghouse timeline forces the issue.
Frequently Asked Questions
Does SB 1028 affect my personal homeowners policy on Citizens?
No. SB 1028 creates clearinghouses specifically for Citizens' commercial property policies — commercial residential (primarily condo and HOA master policies) and commercial nonresidential. Personal lines depopulation continues under the existing clearinghouse established by Florida Statute 627.3518, which has been operational since 2013. However, the same depopulation dynamics apply: Citizens is actively working to move all policyholders into the private market.
What happens if I get a clearinghouse offer and ignore it?
You can't simply ignore it. If an admitted carrier or qualifying surplus lines insurer makes an offer through the clearinghouse, and you choose to remain with Citizens, the equalization adjustment kicks in. You'll pay a surcharge equal to the difference between your Citizens premium and the clearinghouse offer. The goal is to eliminate any price advantage of staying with Citizens once a viable private option exists.
Are surplus lines insurers safe? What if my new carrier goes insolvent?
Surplus lines carriers participating in the SB 1028 clearinghouse must hold an AM Best rating of A- or better, maintain a financial size category of A-VII or higher, and provide five years of audited financial statements, per the bill text. These are substantial financial requirements. However — and this is the big caveat — surplus lines carriers are not covered by the Florida Insurance Guaranty Association (FIGA), which means if the carrier becomes insolvent, there is no state backstop for your claim. This is one of the key tradeoffs SB 1028 introduces — and the primary reason OIR Commissioner Yaworsky objected to the surplus lines component.
How much more will I pay if I'm moved off Citizens?
Depends on your property's risk profile. The surplus lines clearinghouse caps offers at 120% of your Citizens premium, meaning the maximum immediate premium increase from a surplus lines offer is 20%. Admitted carrier offers have no statutory cap but must provide comparable coverage. In practice, the surplus lines clearinghouse cap means your maximum exposure from that path is a 20% premium increase, though admitted carrier offers — which have no statutory cap — may vary more widely depending on your property's risk profile. The equalization adjustment ensures that staying with Citizens doesn't save you money once an offer is on the table.
Can Governor DeSantis veto SB 1028?
Yes. As of late March 2026, SB 1028 has passed both chambers — the Senate 33-1 and the House 88-19, per the Florida Legislature (2026) — but has not yet been signed by the Governor. DeSantis could sign it, allow it to become law without signature, or veto it. Given the overwhelming bipartisan margins and the bill's alignment with the administration's broader Citizens depopulation goals, a veto would be surprising but not unprecedented. Until signed, the January 2027 implementation timeline remains tentative.