New challenges to its alternative dispute resolution program
When the Citizens Property Insurance Board of Governors meets this Wednesday (September 24, 2025), it will receive some welcome news: litigation has dropped by more than one-third so far this year over last, and along with it, litigation costs, which find their way into rates. Citizens staff credit the insurance consumer protection and litigation reforms of 2022 & 2023 passed by the Florida Legislature that included eliminating one-way attorney fees for plaintiff attorneys. Also helping: Citizens’ alternative dispute resolution program through the state Division of Administrative Hearings (DOAH), which although successful, is facing new challenges and criticism.
Litigation: Citizens’ new claims lawsuits averaged 532 per month in the first seven months of this year, down 34% over the same period in 2024. Its legal spending dropped 17% from January through May as a result. The plaintiff was represented at First Notice of Loss (FNOL) in 66% of incoming residential property lawsuits, a 37% decrease from the same period in 2024. The Notice of Intent to Litigate statute is working as intended and AOB lawsuits continue to drop as well. You can read more in our full LMA report on the Citizens Claims Committee meeting here, including its planned contract renewal with a vendor whose pre-event roof pictures and other data feed directly into Xactimate, providing greater accuracy and saving time for field adjusters.
Takeouts: Meanwhile, depopulation is working: Citizens has shifted more than 214,000 policies with $89 billion of exposure into the private market so far in 2025 and now forecasts an end of year policy count of about 516,000 – representing 7% of the overall Florida market share. That’s down from the 1.4 million policies it had in September 2023. The biggest numbers are yet to come this fall, with 871,000 Citizens policies approved for takeout by the private market in September through November, including an extremely large interest in the commercial book, plus nearly 255,000 policies authorized for December. The Citizens Market Accountability Advisory Committee meeting last week focused on Citizens’ appointed insurance agents and the changes underway to make those agents more accountable to procedures under the new policy Clearinghouse. Fully implemented in April for its new business, the Clearinghouse has averted 29% of new business as ineligible for Citizens, with Coverage A averted reaching $34 billion in July. The next stage of the new Clearinghouse, involving policy renewals, is about to begin. You can read lots more in our full LMA report here.
DOAH Flap: Through mid-August, when a court injunction stopped it, Citizens claims dispute resolution program had seen 1,572 cases referred to DOAH to date, with 1,012 having fully resolved. Instituted on policies written since early 2023, it may be invoked by either Citizens or the policyholder in lieu of a lawsuit. The majority of cases have been resolved through voluntary settlement (79%); that includes 52% of the cases where the insured accepted a nominal settlement amount ($500 or less).
Congressman Maxwell Frost (D-Fl)
U.S. Rep. Maxwell Frost (D-Orlando) sent a letter of protest this month to Governor DeSantis, legislative leaders, the head of DOAH, and Insurance Commissioner Michael Yaworsky. “The 2023 requirement that Citizens policyholders resolve all claims disputes through arbitration harms Citizens policyholders by depriving them of the opportunities that private policyholders have to litigate their claims and appeal if they lose,” the letter read. Frost asked for a “detailed description of the considerations and conversations” that went into amending HB 799 to include the mandatory arbitration language.
In an interview with WJXT-TV, News4JAX, I explained that Representative Frost is on a fact-finding mission. But I think if he were to actually look at all the cases he might agree with me: I don’t see anything untoward about these DOAH decisions. DOAH calls balls and strikes; it’s been around more than 50 years as a quasi-judicial institution and its judges have the same standards as those in the courts. There isn’t any partiality or prejudicial decision-making in its halls. In the meantime, Citizens has filed a motion to disqualify the Hillsborough Circuit judge who reinstated the injunction on using DOAH, as reported by the Insurance Journal. We are following this case as well and will keep you informed.
LMA Newsletter of 9-22-25
