July 1, 2025

Florida Repeals “Diligent Effort” Rule for Surplus Lines Insurance

Effective July 1, 2025, the state of Florida has officially eliminated the longstanding “diligent effort” requirement for placing surplus lines insurance. This change, made through House Bill 1549 and signed into law by Governor Ron DeSantis, simplifies how agents can access the surplus lines market—and carries key implications for both insurance professionals and policyholders.

What Is the Diligent Effort Requirement?

Prior to this reform, insurance agents in Florida were required to obtain three written declinations from admitted (authorized) insurance carriers before placing a policy with a surplus lines insurer. This process was designed to protect consumers but was widely seen as outdated and burdensome.

What Has Changed?

🆕 No More Written Declinations

As of July 1, 2025:

  • Agents no longer need to document three declinations from admitted carriers.
  • Policies may be placed directly with eligible surplus lines insurers, provided the updated disclosure form is completed and signed.

🧾 Updated Surplus Lines Disclosure Form

The new law also requires an updated disclosure form that clearly informs policyholders that:

  • The Florida Insurance Guaranty Association does not cover surplus lines carriers.
  • Surplus lines insurers’ rates and forms are not approved by the Florida Office of Insurance Regulation.

Signing this form indicates the policyholder understands other coverage may be available and that surplus lines coverage involves additional risks.

Why Florida Made This Change

The Florida Association of Insurance Agents (FAIA) advocated for removing the rule, calling the three-declination requirement “a waste of time.” FAIA’s B.G. Murphy noted that it added little consumer protection and slowed down the placement of necessary coverage, especially in hard insurance markets like property.

Benefits for Insurance Agents

  • ✅ Streamlines placement of non-admitted coverage
  • ✅ Reduces unnecessary paperwork
  • ✅ Helps serve clients faster in markets where admitted carriers won’t write the risk

What It Means for Policyholders

While the change speeds up access to coverage, it also puts more responsibility on consumers to:

  • Understand that surplus lines policies offer less regulatory protection
  • Know that claims are not backed by the Florida guaranty fund
  • Carefully review policy terms and exclusions

Agents must ensure clients fully understand the disclosures before signing.

What to Do Now

For Insurance Agents:

  • Begin using the new surplus lines disclosure form starting July 1, 2025.
  • Train staff to explain the new disclosures clearly.
  • Update any workflows or quoting tools that rely on the previous three-declination rule.

For Policyholders:

  • Ask questions about how surplus lines work.
  • Compare surplus and admitted coverage carefully.
  • Be aware that lower-regulated coverage may not include consumer protections.

Final Thoughts

This reform is a major step toward modernizing Florida’s surplus lines insurance process. While it reduces red tape for agents, it also makes informed consent even more important. Both producers and policyholders should stay educated and vigilant as Florida’s property and casualty market continues to evolve.