Florida Republicans Target Insurance Industry Practices in New Legislation
TALLAHASSEE — Florida Republicans are focusing their efforts on the property insurance industry during the current legislative session. Proposed bills aim to prevent executives of failed insurance companies from exploiting loopholes and to provide consumers with greater insight into the factors driving insurance rate increases.
Members of the Florida House of Representatives work during a legislative session at the Florida State Capitol, Monday, March 7, 2022, in Tallahassee (AP Photo/Wilfredo Lee)
One key proposal, introduced by Sen. Blaise Ingoglia, R-Spring Hill, seeks to close a perceived loophole that allows executives from failed insurance companies to take on new roles within the industry. Following reporting by the Times/Herald last year, Ingoglia’s Senate Bill 1740 would clarify that executives of failed insurers cannot simply move to an affiliate company. This change is intended to prevent executives from circumventing existing law, which generally prohibits them from working for other insurers if they were responsible for a prior company’s failure.
“Executives at insurance companies that have previously bankrupted their companies should not be exploiting loopholes and skirting the intent of current law,” Ingoglia stated last week.
Ingoglia, who chairs the Senate’s Banking and Insurance Committee and is considered a frontrunner to become Florida’s next chief financial officer, also proposes that state-based insurers be required to maintain at least $35 million in reserves, up from the current $15 million.
Increased Transparency for Consumers
Beyond executive accountability, lawmakers are also focused on giving consumers more information. Several bills are being proposed that would increase public access to information about insurance premiums and company practices.
The Office of Insurance Regulation wants to increase the amount of information available to the public regarding insurance premiums and the insurance companies offering them. Senate Bill 1656, sponsored by Sen. Jay Collins, R-Tampa; and House Bill 1429, filed by Rep. Tom Fabricio, R-Miami Lakes, would require companies to submit a “transparency report” when filing rate requests starting in October. These reports would provide a detailed breakdown of the costs associated with rate filings, including reinsurance, claims payments, legal defense, affiliate company payments, and profit margins.
Insurers would also have to disclose any adverse findings issued against them by the Office of Insurance Regulation in the previous three years.
These transparency reports would be accessible on a new state website. According to the bill’s language, the reports would be written in “concise and plain language to aid consumers in their understanding of insurance.”
Scrutiny of Affiliate Companies and Home Hardening
The legislation proposed by Collins and Fabricio, and supported by regulators, would also provide further insights into the operations of insurers’ affiliate companies. Affiliates often charge insurance companies for services at rates that can be significantly higher than the actual cost, benefiting executives and investors.
Additionally, bills filed by Pensacola Republicans Sen. Don Gaetz and Rep. Alex Andrade would require state regulators to report insurance executives’ compensation and the profit or loss of their companies.
Another area of focus is the My Safe Florida Home program, which provides grants to homeowners for upgrades like impact-resistant windows, doors, and roofs. Senate Bill 1466, filed by Sen. Nick DiCeglie, R-St. Petersburg, proposes allocating 5% of sales tax revenue collected in hurricane-affected counties to fund the program. A related bill, SB 1468, would make the purchase of impact-resistant windows and doors tax-exempt in February.
Ingoglia’s SB 1740 also mandates that homes which receive grants through the program also receive premium reductions.
“If the point of using a state program is to lower premiums, then it should have to result in a lower premium,” Ingoglia said.
