TILLAHASSY – After years of giving Florida homeowners insurance companies pretty much what they wanted In an effort to stem rapidly rising insurance premiums and insurer bankruptcies, state lawmakers have introduced a new approach This week: “Insurer Accountability.”
This is the title of a new bill It would increase fines for bad behavior by insurers, and require them to report more information to the state and follow “best practices” for handling claims.
Property insurers will also be prohibited from dropping the policyholder until repairs to their home are completed.
“If there are bad actors, we will hold them accountable,” said the bill’s sponsor, Sen. Travis Hutson, R. Elkton.
Hutson said the bill aims to strike a “healthy balance” of oversight in the state’s insurance market.
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A Senate committee on Wednesday voted in favor of the bill, but not before hearing lobbyists and insurance industry groups speak out against it.
“(We) just want to make sure we’re really going after the bad guys and not the entire insurance industry,” said Carolyn Johnson, a senior director at the Florida Chamber of Commerce, which counts insurers among its members.
The legislation is an acknowledgment that insurers have received a light touch from state regulators, who routinely approve company rate filings and claims to make it harder to sue insurers.
Former Bureau of Insurance Regulatory Commissioner David Altmaier has become an insurance industry lobbyist and joined the board of a Bermuda-based reinsurer after leaving the position in December.
The state’s elected chief financial officer, Jimmy Patronis, oversees insurance fraud and complaints against insurers while collecting nearly $2 million in campaign contributions from the industry. After a surge in complaints about insurance companies in the wake of Hurricane Ian, the Patronis office limited the state’s complaints hotline to only three hours a day, citing limited staffing.
Related: Here’s why the Florida home insurance hotline is only open 3 hours a day
The new commissioner of the Bureau of Insurance Regulation, Mike Yawerski, is Altmaier’s former chief of staff. Hutson said he is interested in holding insurance companies to account.
“We’ve got a new mayor in town… who really wants to go after these guys,” Hutsune said of Yaorsky. “Some of that language came directly from him, where he said, ‘I need more tools in my toolbox.'”
Under SPB 7052:
- Insurance companies will be required to report their claims handling policies to the state.
- Fines for insurers will increase from a maximum of $20,000 to $100,000 for “unintentional” violations and from a maximum of $200,000 to $1 million for “willful” violations.
- Regulators will have broader authority to conduct checks of the insurer’s behaviour.
- Insurance companies will be banned From paying bonuses to officers and directors when an insurance company is bankrupt or insolvent.
The Patronis office will get five new positions, and Hutson said he wants to devote more resources to the Insurance Regulatory Office, at Yaworsky’s suggestion.
The legislation also targets specific actions by insurance companies to undermine payment claims.
During a special legislative session last year to address the property insurance crisis, lawmakers scrapped the requirement that insurers must pay the policyholder’s attorneys’ fees if the policyholder sues and wins. It was the latest change by lawmakers to make it more difficult for homeowners to sue their insurance companies, after the companies complained that the lawsuits drive up rates.
Since then, insurers have argued in court that the ruling was retroactive, and applied to policies that were in effect before the legislation was passed. SPB 7052 states that the judgment is not retroactive.
It also addresses allegations made by several private adjusters who work for insurance companies who said insurance companies manipulated their reports to underpay homeowners for their claims. allegations were I reported in an article for the Washington Post last month.
The bill would require insurers to document any changes in the adjuster’s report and to include the name of the person who ordered the changes.
Recent reforms to the legislature have not yet resulted in low rates. In recent weeks, First Community Insurance Co. requested an overall increase of 44.8%, Kin Insurance Network requested an overall increase of 61.5%, and American Strategic Insurance Corp. and ASI Preferred Insurance Corp. requested increases of nearly 20% in rates.
During hearings on First Community Insurance and Kin Insurance rates, company representatives said the latest legislation didn’t make any sense so far impact on prices.
Under the bill, insurers will be required to factor in their rate filings the impact of recent legislative changes.
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