The Florida Insurance Power Triad: Insurance Industry, Florida Insurance Regulators, and the Legislature

​The recent "insurer accountability" bill proposed by Florida lawmakers is a response to the long-standing problem of homeowners insurance in Florida. The legislation aims to increase fines for insurance companies that engage in bad behavior, require them to provide more information to the state, and follow best practices for handling claims. The bill also prohibits property insurance companies from dropping policyholders until their homes have been repaired. However, the real problem lies in the relationship between the insurance industry, regulators, and legislature, all of which appear to be working against Florida policyholders despite outwardly stating they are protecting policy holders from premium rate hikes because of litigation attorneys’ fees. 

Here are some highlights of the proposed bill:
 

1. Creation of s. 624.115, F.S.: Specifies a requirement for the Office of Insurance Regulation in referring criminal violations.
2. Amendment of s. 624.307, F.S.: Authorizes electronic responses to certain requests from the Division of Consumer Services of the Department of Financial Services concerning consumer complaints; revises the timeframe in which responses must be made; revises administrative penalties.
3. Amendment of s. 624.315, F.S.: Requires the office to annually and quarterly create and publish specified reports relating to the enforcement of insurer compliance; requires the office to submit such reports to the Financial Services Commission and the Legislature by specified dates.
4. Amendment of s. 624.316, F.S.: Revises the minimum intervals in which the office must examine certain insurers; revises periods that examinations must cover; requires the office to create a specified methodology for scheduling examinations of insurers; specifies requirements for such methodology; provides construction.
5. Amendment of s. 624.4211, F.S.: Revises administrative fines the office may impose in lieu of revocation or suspension.
6. Creation of s. 624.4301, F.S.: Specifies requirements for residential property insurers temporarily suspending writing new policies in notifying the office; provides applicability and construction; authorizes the commission to adopt rules.

https://www.flsenate.gov/Session/Bill/2023/07052

The legislation is an implicit admission that the insurance industry has received a light touch from state regulators, who have routinely approved company rate writings and advocated for making it harder to sue insurers. This cozy relationship between insurance regulators and the industry can be seen in the case of the previous Office of Insurance Regulation Commissioner, David Altmaier, who became an insurance industry lobbyist and joined the board of a Bermuda-based reinsurance company after leaving the post. Furthermore, the state's elected chief financial officer, Jimmy Patronis, who oversees insurance fraud and complaints against insurers, has received nearly $2 million in campaign contributions from the industry. When the bureaucrat that oversees complaints against insurers receives nearly $2 million in campaign contributions from the insurance industry, it’s a prime of example of the fox guarding the hen house.  It’s also a sad day for Florida policy holders who believe the legislature has their back; it doesn’t, it has the insurance industry’s back. At times it seems as though the legislature serves at the pleasure of the insurance industry.
 
The recent reforms by the legislature have not yet led to lower insurance rates. Despite recent legislation, insurance companies such as First Community Insurance, Kin Insurance Network, and American Strategic Insurance Corp. have requested overall rate increases ranging from near-20% to 44.8% and 61.5%. This is despite the fact that the legislature eliminated the requirement that insurers pay policyholders' attorneys' fees if they sue and win, and addressed allegations made by private adjusters that insurers manipulated their reports to pay homeowners less for their claims.

In conclusion, the relationship between the insurance industry, regulators, and legislature in Florida seems to be working against policyholders. The recent "insurer accountability" bill is a step in the right direction, but more needs to be done to ensure that the insurance industry is held accountable for its actions and that Florida policyholders are protected.

(See https://www.tampabay.com/news/florida-politics/2023/04/05/florida-insurance-legislature-insurers-accountability-premiums-homeowners/)