March 24 marks the two-year anniversary of Florida’s sweeping tort reform legislation, signed into law by Governor Ron DeSantis in 2023. The reforms—most notably House Bill 837—were designed to curb runaway litigation that had severely destabilized the state’s homeowners insurance market.
Before the law took effect, Florida stood out nationally for all the wrong reasons. Although the state accounted for only a small fraction of U.S. homeowners insurance claims, it generated the overwhelming majority of related lawsuits. That imbalance fueled rising premiums, insurer insolvencies, and a market many considered close to collapse.
Two years later, the early results suggest the reforms are doing what they were intended to do.
A market showing signs of recovery
Since the passage of HB 837 and related measures, litigation volumes have fallen sharply. Frivolous lawsuits are down by more than 40 percent, easing pressure on insurers’ loss costs and legal expenses.
Consumers are beginning to feel the effects as well. Homeowners insurance rates have declined by an average of roughly 5.5 percent statewide, a notable reversal after years of relentless increases. Perhaps most telling, more than ten new insurers have been approved to enter the Florida market, signaling renewed confidence among capital providers.
The improved environment has even paved the way for a planned initial public offering by Florida-based insurer Slide—something that would have been unthinkable just a few years ago, when the market was widely viewed as fragile and unpredictable.
Media controversy reignites old narratives
Despite these improvements, recent media coverage has stirred debate in the Florida legislature and beyond. A series of articles from major state newspapers suggested that insurers had been quietly funneling large sums of money to affiliated entities while claiming financial distress.
The reports focused on managing general agents (MGAs) owned by insurance companies, implying that these relationships obscure insurers’ true financial health. The framing has reignited concerns that the state’s insurance recovery may be less genuine than it appears.
Understanding MGAs and their role
In reality, MGAs are a standard and well-established component of the insurance ecosystem. They perform essential functions on behalf of insurers, such as sourcing business through retail agent networks, underwriting policies, issuing coverage, handling premium collections, and managing claims.
For these services, MGAs are compensated through a percentage of premium, similar to independent agents. In Florida, it is common for insurers to operate with wholly owned MGAs—a structure that regulators understand and oversee.
While there were isolated cases more than a decade ago where affiliated MGAs were accused of excessive profit-taking, those situations prompted regulatory intervention and reforms. Since then, Florida’s insurance regulatory framework has matured significantly, with stronger capital standards, enhanced oversight, and improved risk management practices.
Context matters when reviewing historical data
The financial periods highlighted in recent media reports largely coincide with years when Florida experienced severe hurricane activity. During those years, homeowners insurers posted extremely high loss ratios—well above sustainable levels—even before accounting for operating expenses.
These results were not hidden, nor were they unusual given the catastrophe environment at the time. Statutory filings clearly reflected the financial strain insurers were under, underscoring why the market required structural reform.
Ongoing oversight and a balanced conversation
State regulators have recently suggested refining how “fair and reasonable” compensation for services like MGA functions is defined, incorporating factors such as insurer financial health and dividend payments. While lawmakers previously declined to pursue such changes, the discussion highlights the importance of continuous oversight as the market stabilizes.
Debate around Florida’s insurance system is healthy and necessary. What is equally important is grounding that debate in accurate context and current data—not narratives shaped by conditions that existed before reform.
Two years in, the trajectory is clear
Florida’s tort reform is not a cure-all, and challenges remain. But at its two-year mark, the evidence points to meaningful progress: fewer lawsuits, moderating rates, new market entrants, and renewed investor interest.
The state’s insurance market has moved a long way from the brink. As policymakers, regulators, and industry leaders continue to evaluate next steps, the focus should remain on preserving stability while ensuring transparency and consumer protection.
The conversation isn’t over—but the direction of travel matters.
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