During Wednesday’s Board of Governors meetings, a Citizens Property Insurance Corp. committee voted to recommend a full 15% average rate increase for personal lines in 2026 — the maximum allowed under Florida’s statutory glidepath. If approved, it would mark the steepest increase permitted for the state-backed insurer.
However, not everyone on the board agreed. Two members voted against the recommendation, breaking from a recent pattern of unanimous or near-unanimous support for rate hikes intended to steer customers back into the private insurance market. Their resistance signaled a potential turning point in the ongoing discussion around how Citizens should set its rates.
“We’ve reached a tipping point,” said board member Robert Spottswood, a real estate developer based in the Florida Keys. “Property owners are skipping coverage because it’s simply unaffordable. Commercial buildings can’t manage the cost. Affordable housing is being strained to the brink due to insurance rates. We have to find a way to bring prices down — not up.”
Board member Charlie Lydecker also voted “no” on the proposed increase. Earlier in the day, he pointed to recent profit margins among private carriers — including generous executive pay — as a reason to reevaluate Citizens’ pricing model.
“When I see a company handing out $50 million in compensation to an executive, I start to question our entire approach,” said Lydecker, CEO of Foundation Risk Partners, an insurance brokerage.
He was referencing news that Slide Insurance Co., a Tampa-based carrier that recently went public, paid its CEO Bruce Lucas over $21 million in 2023 in salary, bonuses, and stock awards. Lucas’ wife, who serves as Slide’s chief operating officer, received $16.5 million.
By law, Citizens must maintain rates that are “actuarially sound” but not competitive — meaning higher than the voluntary market — yet in practice, this has been difficult. Florida’s rate cap (glidepath) limits how much Citizens can increase rates each year. Earlier in 2024, the state’s Office of Insurance Regulation (OIR) rejected a full 15% hike and instead allowed less than a 9% average increase.
As a result, in some parts of Florida, Citizens’ rates are still up to 30% lower than what private insurers charge.
Lydecker said it may be time for a fundamental reassessment: “If a market that just went through a crisis can now afford huge executive payouts, maybe we’re defining ‘actuarially sound’ incorrectly,” he said. “Or we’re chasing an unrealistic goal of being a true last-resort provider. Why are we, a taxpayer-supported entity, still playing by those rules?”
Citizens CEO Tim Cerio acknowledged the issue.
“These are valid questions,” Cerio said. “The OIR is actively exploring what it really means to be ‘non-competitive.’ Should it mean even higher rates, considering how the rest of the market is behaving?”
Board member Jamie Shelton suggested initiating discussions with lawmakers and regulators about whether a new operating framework is needed. Spottswood agreed.
Additional Highlights from the Board and Committee Meetings:
Citizens continues to shrink its policy count, aided by an active depopulation program and the re-entry of private insurers into the Florida market. Since the start of 2024, the OIR has approved about 2.2 million takeout offers, with over 1 million letters sent to policyholders. About 678,000 takeout offers have been accepted so far.
The number of policies in force has dropped from 1.2 million last year to around 777,500 today — a 36% reduction. Overall exposure has decreased by $225 million, and Citizens’ market share has fallen from 15% to 9% in under 18 months.
A revamped clearinghouse platform launched in April now makes it easier for agents and customers to find coverage options with private carriers. Enhancements include information about wholesalers and tools for comparing carriers.
Board member Lydecker noted that the new system will require more work from insurance agents and urged Citizens to consider additional agent training and resources.
Citizens has also introduced new consumer tools, including a “find-a-carrier” button on its website and a point-of-sale disclosure form that will take effect September 1. This form will show which companies are participating in the clearinghouse and which ones the agent is affiliated with.