Florida Legislature Advances Insurance Reform Bills
Following years of escalating insurance premiums, homeowner frustration, and concerns about property insurance carriers’ financial practices, the Florida Legislature is considering several bills described as “consumer friendly.” One such bill, Senate Bill 1740, introduced by Senator Blaise Ingoglia, recently secured unanimous approval from the Senate Banking and Insurance Committee.
Senator Blaise Ingoglia, sponsor of SB 1740.
SB 1740 proposes several changes to current law.
Firstly Senator Ingoglia’s bill would lengthen the time during which insurance executives linked to insolvent carriers are barred from leadership positions in other insurance companies. Current state law prohibits these individuals from holding such positions for at least two years if their actions contributed to the insolvency. Ingoglia’s bill increases this prohibition to five years.
Furthermore, the bill seeks to strengthen the Office of Insurance Regulation’s (OIR) oversight capabilities, particularly in light of a 2022 draft report that questioned the financial interactions between carriers and their managing general agents. The bill stipulates that if former officers of insolvent carriers are found to have violated the rules, the OIR “shall prohibit an insurer or reciprocal insurer authorized in this state from paying any compensation to a managing general agent, affiliate, attorney in fact that has an officer or director or is an attorney in fact that engaged in such violation until the office determines the violation has been remedied.”
The measure also sets to increase the minimum surplus capital requirements for new, domestic insurers looking to operate in Florida. In addition, the bill would refocus the My Safe Florida Home wind-mitigation grant program, ensuring that grants are used exclusively for retrofits that result in lower premiums for homeowners.
A committee-approved amendment to the bill would prohibit the use of artificial intelligence, machine learning, or algorithms as the sole basis for denying insurance claims. “An insurer’s decision to deny a claim or any portion of a claim must be made by a qualified human professional,” the amendment states.
Finally, the amendment would prevent the OIR from requesting that carriers waive rate-filing approval for rate decreases, “provided that the decrease is not solely due to a reduction in coverage or changes to policy forms.”
SB 1740 must pass at least one more Senate committee before a floor vote. A related bill in the House is under consideration by the House Banking and Insurance Subcommittee of the Commerce Committee.
