TALLAHASSEE -- Florida’s mammoth state-run insurance company is looking to downsize, with lawmakers turning to unregulated out-of-state carriers to help with the effort.

The state House passed a bill on Friday that would allow so-called “surplus lines” carriers to take over policies from Citizens Property Insurance Corp., if they meet certain criteria.

Surplus lines carriers are not regulated by the Office of Insurance Regulation and can differ greatly from the state’s admitted insurers, a point that opponents of the bill pushed repeatedly.

“Everyone agrees that Citizens needs to be smaller, but the way to do that is not to allow essentially unregulated companies to move in like vultures,” said Sean Shaw, founder of Policyholders of Florida. “This is essentially deregulating the insurance market in Florida for rates.”

Bill sponsor, Rep. Jim Boyd, R-Bradenton, included several safeguards to raise the barrier of entry for surplus lines insurers looking to pick up clients in Florida. For example, the carrier would have to have at least $50 million in surplus, a strong financial record and enough resources to withstand two massive hurricane hits. The insurer also must offer homeowners coverage that is similar to their Citizens policy.

“Surplus lines carriers have been [operating] in this marketplace for years on the commercial side and actually they’re very good, very strong and very competitive,” Boyd said.

Still, opponents of the bill pointed out some major differences between Citizens and surplus lines insurers, which typically have higher premiums. For example, surplus lines carriers can raise their rates by any amount, and if they become insolvent, the Florida Insurance Guaranty Association will not offer homeowners a safety net for paying claims.

Under the proposal, homeowners could be automatically shifted into a surplus lines account if they do not opt out within 30 days of being notified. However, consumers who are unhappy with their new carrier could later return to Citizens.

With nearly 1.5 million policies, Citizens is the largest insurer in the state and is exposed to more than $500 billion in potential claims. Because of that massive exposure, Citizens policyholders could be liable for multiple assessments, or charges, after a major storm hits. Surplus lines carriers may offer homeowners an alternative to the over-extended state-run insurer, Boyd said.

The bill is one of several measures this year that look to increase competition within the state’s insurance market. Proponents argue competition is necessary to bring down overall costs. Boyd said his bill could affect 50,000 policies or more.

The bill, which has one more stop in the Senate before a full vote, passed the House, 66-48.

Rep. Frank Artiles, R-Miami, voted against the measure, calling it a “Band-Aid on a sucking chest wound.”

“It’s not fair and it’s not a fair playing field,” he said last month. “The consumer that’s 85 years old in Miami-Dade County that does not speak English, does not know what’s going [on]… is going to be affected with this bill.”