Exposing the Truth: How Florida’s Insurance Industry Misled Homeowners — And My Plan to Fix It
The recent revelations concerning Florida's property insurance industry have unveiled a troubling pattern of financial mismanagement and regulatory oversight failures. As Dr. Frank W. Collige, a candidate for Florida's Chief Financial Officer, I am committed to ensuring transparency and accountability within our state's insurance sector. The concealment of critical financial reports and the subsequent misrepresentation of insurers' financial health have directly impacted Florida homeowners, resulting in unjustified premium increases and eroding public trust.
In March 2022, the Florida Office of Insurance Regulation (OIR) commissioned a comprehensive analysis to scrutinize the financial practices of Florida-based insurance companies and their affiliated entities. The study revealed that between 2017 and 2019, while insurers reported a net loss of approximately $432 million, their affiliates amassed net incomes totaling around $1.8 billion. Furthermore, during this period, insurers distributed approximately $680 million in dividends to shareholders and redirected substantial funds to affiliated companies.
Despite the alarming findings, the OIR, under the leadership of former Insurance Commissioner David Altmaier, failed to act upon or disclose the report's contents to lawmakers and the public. This omission occurred during a critical juncture when the Florida Legislature was enacting reforms purportedly to stabilize the insurance market. The non-disclosure of this report raises significant concerns about the integrity and effectiveness of our regulatory institutions.
In response to these revelations, Florida House Speaker Daniel Perez has initiated an investigation into the financial practices of insurance companies operating within the state. The House Insurance & Banking Subcommittee has been empowered to subpoena witnesses, place them under oath, and engage forensic accountants to conduct a thorough audit of affiliated company transactions. This proactive approach aims to rectify past oversights and prevent future mismanagement.
To restore public confidence and ensure the financial stability of Florida's insurance market, the following reforms are imperative:
Enhanced Transparency in Affiliate Transactions: Mandate that insurers publicly disclose all transactions with affiliated entities, including detailed breakdowns of services provided, fees charged, and profit margins. This transparency will deter profit-shifting and ensure that fees are commensurate with market rates.
Regulatory Oversight Strengthening: Empower the OIR with the authority and resources to scrutinize and approve all affiliate agreements, ensuring they are justified by operational necessity rather than profit manipulation.
Independent Audits: Require annual independent audits of insurance companies and their affiliates to verify financial integrity and compliance with state regulations.
Public Accountability Measures: Implement mechanisms for regular reporting to the Legislature and the public on the financial health and practices of insurers and their affiliates, fostering an environment of accountability and trust.
The concealment of critical financial information by regulatory authorities and the subsequent exploitation by insurance companies have had detrimental effects on Florida's homeowners. As your candidate for Chief Financial Officer, I pledge to champion these reforms, ensuring that our insurance industry operates with the highest standards of transparency and integrity. The citizens of Florida deserve a regulatory framework that prioritizes their interests and holds all stakeholders accountable.
