Ryan Files Protest Over Clearinghouse Contract Awarded to Brown & Brown Firm

The months-long effort to put a Ryan Turner Specialty insurance unit in charge of a lucrative commercial policies clearinghouse in Florida may be far from over, after Ryan filed notice of intent to protest the awarding of the contract to another brokerage.

Tallahassee attorney Eduardo Lombard last week sent a letter to Citizens Property Insurance Co., notifying Florida’s state-created insurer that Ryan’s Risk Market Infrastructure LLC subsidiary has taken issue with the plan to give the clearinghouse contract to Bridge Specialty Wholesale, a division of the national insurance brokerage Brown & Brown, based in Daytona Beach.

Citizens announced Sept. 1 that it had awarded the contract to Bridge to develop and administer a system that will help insurance agents move commercial policies from Citizens to qualified surplus lines insurers, similar to a residential policy clearinghouse that has been in use for years.

Citizens’ intent to award notice explained that if a contract cannot be worked out with Bridge, the insurer would seek to contract with the “next-ranked eligible vendor”—Risk Market Infrastructure.

That was not enough for the Chicago-based Ryan Turner, one of the largest U.S. brokerages that handles surplus lines coverage. Lombard’s letter did not explain the grounds for Ryan’s protest. Citizens has not said what the final contract may be worth.

“Please provide us with the estimated contract amount so that RMI can timely secure a protest bond,” Lombard’s Sept. 4 letter reads.

Lombard declined to comment Friday morning about the reasons for Ryan’s objections.

The protest differs sharply from Ryan’s statement released just a few days earlier.

“Although we are disappointed that Risk Market Infrastructure, a Ryan Specialty subsidiary, was not selected as the administrator, we remain very supportive of the concept of a clearinghouse and will be pulling for its success,” the Ryan statement noted on Sept. 1.

The protest is the latest twist in a story that began in February, when Ryan representatives reportedly began lobbying Florida lawmakers to mandate a commercial clearinghouse system. A slide deck circulated to legislators indicated that Ryan had already taken steps to build a risk-exchange platform—”An AI-Enabled Ryan Specialty Enterprise.”

Despite concerns from other brokers, insurance agents and regulators, who have argued that a clearinghouse may be unnecessary for the shrinking number of commercial policies held by Citizens, lawmakers in March approved Senate Bill 1028, establishing the framework for the commercial clearinghouse. Florida Gov. Ron DeSantis signed it into law in June.

Under the law, Citizens officials had three months—a period that ends next week—to finalize a contract. But the law also allows Citizens to extend the period, which could allow more time for the protest process to play out.

Protests are not uncommon, Citizens’ spokesman Michael Peltier said. State law, in many cases, allows bidders on state contracts to protest if they feel the process was flawed or bids were not fairly considered. Notices of intent to protest must be filed within three days of a contract award notice. That gives the protesting company time to review. The firm then has 10 days to file a formal protest.

If Citizens does not reach a settlement with Ryan or re-bid the contract, the firm can then appeal to the Florida Division of Administrative Hearings.

A few Florida insurance agents and others in the industry have suggested that any brokerage that handles surplus lines would likely have a conflict of interest if it administered a clearinghouse. Florida Insurance Commissioner Mike Yaworsky last spring urged lawmakers to build in some safeguards, but the final bill left out a clause that would have barred the program manager from having conflicts of interest and would have required the administrator to be based in Florida.

The law does note that it does not authorize rebates or other inducements to agents, which may constitute unfair trade practices as defined by Florida Statutes, Chapter 626, Part IX.