$36M Clearinghouse System Has Problems, Some Fla. Agents Say. Citizens Disagrees

It was supposed to simplify and speed the process for insurance agents trying to find private coverage for Citizens policyholders, a vital link in depopulating Florida’s oversized insurer of last resort.

But a year after the $36 million Citizens clearinghouse comparative rating sytem, known as EZLynx, was launched, some agents say they’ve grown so frustrated that they’ve given up on it, preferring to avoid dealing with Citizens Property Insurance Corp. as much as possible.

“I’ve said it before: There’s nothing easy about EZLynx,” said Lee Gorodetsky, an insurance agency owner in Weston, Florida, and member of Citizens’ Market Accountability Advisory Committee. “It makes it very difficult to quote. Why should we bother taking policies from Citizens when we can’t write them with someone else?”

Dozens of Florida agents have gone so far as to form a Facebook group to share complaints and possible workarounds for the system. Recent comments on the social media page range from error messages that are not addressed by the company, to being unable to bridge to insurers, to too many unnecessary questions asked by the system, to delays and incorrect notices of offers from primary carriers. One said that the system gave a notice of an offer of coverage from a private carrier, but when the carrier was contacted, no offer was available.

“Just cut them off and rip that band aide off, then you won’t have to worry about it again. Best decision I’ve made,” one agent commented on Facebook.

“They’ve spent millions on this system and it’s a mess,” said John Gardner, an agency owner in Fort Myers.

Agencies pay roughly $150 per user to utilize the rater system.

A top executive at EZLynx said the company is regularly working on improvements. President Michael Streit told Insurance Journal that roughly 21,000 Florida agents have used the software, and complaints have been relatively few.

“We do a ton of customer feedback sessions. The feedback we’re getting is not overwhelmingly negative,” Streit said.

Some complaints heard in Florida may already have been addressed in recent months, he noted.

He added that Dallas-based EZLynx, part of Applied Systems Inc. since 2021, is one of the largest and fastest-growing insurance management and rate comparison software firms in the country. It has been in business for 22 years, and now has more than 300 member carriers.

But the Citizens clearinghouse package is unlike any other. Florida’s state-created insurer, still the largest property insurance carrier in the state, is unique in the world: Homeowners can sign with Citizens, with its glidepath-limited rates, but only if other carriers’ offered premiums are 20% higher for comparable coverage. Unlike most carriers, Citizens’ stated goal is to get smaller, not grow larger.

“So, they have to be really precise. It’s a hard problem to solve,” Streit said.

Citizens officials also are aware of the agents’ concerns but do not believe that EZLynx should be scrapped.

“We believe the core design of the new clearinghouse platform delivers what we intended to provide agents, which was a smaller initial question set that allows an agent to obtain an initial eligibility decision faster,” said Michael Peltier, media relations manager for Citizens.

He noted that on about 5% of new business applications, agents have to take additional steps to ensure the applicant meets eligibility criteria, so that a carrier can be compared.

Carriers seem to like the system, he noted.

“We will continue to seek improvements to provide a superior policyholder and agent experience without adding additional complexities to the initial application process,” Peltier said.

The move toward a new computerized clearinghouse system began a few years ago amid concerns that Citizens’ clearinghouse was underutilized and the insurer was growing too large, with too much exposure. A report by the Florida Auditor General’s office noted that few carriers were participating in the clearinghouse, and many renewals were not shopped around, slowing the depopulation effort.

By then, Citizens in 2022 had already requested proposals from tech companies for a revamped system. Eight vendors provided proposals. The Citizens Board of Governors selected Applied Systems’ EZLynx, and in late 2023, a contract was signed for $35.7 million over a five-year period. One competing vendor, Bolt Solutions, objected to the bid award, claiming that selection process was arbirtrary and biased. An administrative law judge with the state Division of Administrative Hearings ruled against Bolt. (Bolt was the vendor on a 2014 Citizens clearinghouse system, a $45 million, 10-year contract.)

By mid-2024, EZLynx was up and running. When working as intended, the system is a real time-saver, company officials said. Instead of having to input pages of data about a property into the Citizens’ system, then do it again for private carriers in order to obtain a quote, agents in most cases should be able do everything in one place with EZLynx.

“The great thing we are able to do here, we put Citizens into the actual rating workflow with all the other carriers,” said Ryan Beukema, EZLynx’s director of product management. “You’re not having to replicate a bunch of stuff.”

Two sources of the apparent issues, Beukema said, may be questions from carriers and input from agents themselves. In a demonstration of the product this week, Beukema showed how agents are walked through multiple fields that ask for a range of information. If any of the fields are left blank, EZLynx generates an orange triangle error indicator on the field.

But that happens early in the process, so that agents cannot submit the property for a quote unless all information is included. Even a missing email address will prevent completion.

Insurance companies also may play a role in causing frustration. Carriers can ask questions about the property that may not be strictly necessary, forcing agents to go to the carrier’s own site, which can require further, extensive data entry, slowing down the process, he said.

“Sometimes carriers will add in friction to try and not take a piece of business if they don’t want it. That’s where we run into some issues,” Beukema said. “We saw that a lot last year in the hard market.”

But after the 2023 Florida legislative changes that have stemmed excessive lawsuits and have reduced carriers’ loss adjustment and litigation costs, the market has softened and the “friction” has lessened, he explained.

Streit noted that EZLynx updates its software quarterly and any snafus will continue to be addressed.

“It’s a complicated but important problem that EZLynx is trying to solve,” Streit said. “And we knew that. We’re not done. We’re working on it. Because it’s complicated, there are going to be issues that no one can solve and annoyances that get created.”

Despite the reported problems, the Citizens clearinghouse may be effective enough. Citizens has continued to shrink in policy county. As of Aug. 8, the insurer reported 783,344 policies in force. That’s a slight uptick from June but is almost half of the number of policies Citizens held in September of 2023, before legislative reforms had an impact and before several new insurance companies moved into the Florida market.

Topics Agencies