The flow of insurance executives in Florida is poised to slow significantly under the current language of a new bill. Legislation designed to impose more stringent constraints on insurers and their top executives in Florida, while also defending consumers from claim denials based solely on artificial intelligence, is making its way through the upper chamber of the Legislature.
Members of the Senate Banking and Insurance Committee recently voted 7-0 in favor of SB 1740. Senator Kathleen Passidomo, a Republican from Naples, described the bill as a “pro-consumer insurance bill” intended to lower premiums, decrease insurer insolvency, and “hold insurers accountable for (their) prior, poor decisions.” Senator Blaise Ingoglia, a Republican from Spring Hill, initially filed the measure but was not present when the bill was discussed because he left the Banking and Insurance Committee meeting, which he chairs. Passidomo presented the measure in his absence.
SB 1740 would prevent an insurance executive whose company went insolvent from holding an executive position in another insurance company for five years. The current prohibition period is only two years. The bill also proposes more than doubling the capital needed to start a domestic insurance company in Florida, from $15 million to $35 million, among other increases. It would require that funds allocated through Florida’s house-hardening My Safe Florida Home program must be directed toward projects that yield a mitigation credit from insurers to homeowners resulting in a reduction in their premiums.
Passidomo also introduced — and the committee approved — an amendment specifying that artificial intelligence cannot be used as the sole basis for denying an insurance claim. Passidomo stated that an “actual human being” would need to be involved in the process, crediting Senator Jennifer Bradley’s bill on AI in health insurance (SB 794) for inspiring the proposed change.
Adam Basford of Associated Industries of Florida told the panel that his group has been working to create a coalition of its members and business partners to examine AI and its implications for Florida industries. He urged lawmakers to find a balance between ensuring safety in “high-risk areas” and avoiding obstruction of innovation. “We need to be very careful about allowing for those efficiencies while making sure we regulate it the right way,” he said.
Insurance rates have surged in recent years, far exceeding inflation and prompting lawmakers to hold Special Sessions and introduce numerous bills to address the issue. While Governor Ron DeSantis recently announced premium rate reductions in certain parts of the state, many areas are still awaiting relief. The substantial costs associated with severe storms, such as Hurricane Milton last year, caused some insurance companies to withdraw from the state. Concurrently, Citizens Property Insurance Corporation, Florida’s state-run insurer, canceled residents’ policies as part of its “depopulation” program.
However, the situation may not be as dire for insurance companies as they have portrayed. A 2022 study obtained by the Tampa Bay Times, after a two-year wait for public records, revealed that while Florida insurers claimed to be losing money, their parent companies and affiliates generated billions, including $680 million in shareholder dividends. The study’s author concluded that most insurance executives in Florida violated state regulations. State lawmakers were never given access to the report.
SB 1740, which Senator Barbara Sharief, a Democrat from Davie, is co-sponsoring, will next proceed to the Appropriations Committee on Agriculture, Environment and General Government. Following one more committee stop, the bill will then be put to a floor vote. The bill has a companion in the House (HB 1433), filed by Republican Representative Yvette Benarroch from Marco Island, which is awaiting a hearing before the first of three committees.
