Florida Lawmakers Demand Probe into Insurers’ Profits
Florida House Speaker Daniel Perez is pushing for an investigation following reports that property insurance companies may have misrepresented their financial standing to justify premium hikes. FOX 13’s Regina Gonzalez reported on the story, which cited a report obtained by the Miami Herald and Tampa Bay Times.
The report, covering the period from March 2022, indicates that insurance providers may have misled lawmakers into believing they were financially vulnerable to secure premium increases. The report highlights the disparity between the financial results of the insurers and their affiliate companies.
Between 2017 and 2019, the insurance companies detailed in the report showed a net loss of approximately $432 million. However, their affiliate companies recorded a net income of $1.8 billion. Simultaneously, executives reportedly distributed roughly $680 million in dividends to shareholders and diverted billions more to affiliates.
The practice of shifting funds is not inherently illegal for insurers. However, the findings suggest that considerable amounts were removed from the companies by executives, potentially violating state regulations. This, according to the report, may have weakened Florida insurers, making it more difficult for them to pay policyholder claims, contributing to the state’s insurance crisis.
House Speaker Perez (R-Miami) announced that the Insurance & Banking Subcommittee will look into the report. The committee will have the authority to subpoena witnesses, interview them under oath, and hire experts.
“I’m not an insurance expert, but I think the people of Florida should have the ability to look into it and read it themselves,” Perez stated. “And the committee members should have, and I should have, the ability to dive deep into it and ask more detailed questions. We’re looking at it right now from a 50,000-foot view. I think it’s better for our members to have the opportunity to ask those questions on a one-on-one basis and go from there.”
Some state lawmakers have also suggested that Florida’s attorney general should further investigate the matter. The Office of Insurance Regulation responded to inquiries about the report, claiming that it was a draft document and never finalized, and that is why state lawmakers did not see the information.
