One thing massive is going on this morning in Tallahassee. The Florida Home Insurance coverage and Banking Committee is holding a long-overdue investigative listening to starting at 8:00 a.m., and for as soon as, the highlight is shining the place it ought to—on the Florida Workplace of Insurance coverage Regulation (OIR) and its management. I beforehand famous this upcoming listening to in Florida Legislators to Examine Whether or not Property Insurers Used Accounting Tips to Conceal Earnings.
I wrote about what’s on the coronary heart of the inquiry in Secret Report Proves Florida Insurance coverage Executives Wrongful Self-Dealing — a secret report that was buried deep inside OIR for almost three years. A report that, if launched on the time, might have uncovered how insurance coverage executives and their affiliated firms had been pocketing billions whereas Florida owners had been drowning in skyrocketing premiums. Those self same insurance coverage executives, their lobbyists, and David Altmaier had been telling Florida’s legislators of the good monetary have to overhaul insurance coverage policyholder safety legal guidelines and blaming lawsuits as the explanation why insurers couldn’t earn money in Florida.
As a substitute of guaranteeing transparency, former Florida Insurance coverage Commissioner David Altmaier and his successor, Michael Yaworsky, stored the report hidden. It solely got here to gentle after a journalist, refusing to take “no” for a solution, pried it free by way of a Freedom of Data Act request.
Now, lawmakers are demanding solutions, and at present’s listening to is the primary actual try to tug again the curtain on what could also be one of the egregious failures of regulatory oversight in current Florida historical past.
What’s within the Secret Report?
This isn’t just a few boring monetary doc full of numbers solely an actuary might love. The report paints a damning image of how Florida’s home insurance coverage firms had been enjoying a monetary shell sport—one which allowed them to say losses publicly whereas funneling billions into affiliated firms behind the scenes.
Listed here are the massive takeaways from the report:
- Insurance coverage firms claimed they had been shedding cash—however their affiliated service firms raked in $14 billion in earnings over three years.
- Managing Normal Brokers (MGAs), claims corporations, and different affiliated entities had been charging “charges” as excessive as 63% of premiums—a determine that defies logic and equity.
- Some firms had been forgiving or waiving charges to create the phantasm of monetary misery—probably deceptive regulators and lawmakers into approving huge price hikes.
- Insurers had been paying out big dividends to father or mother firms and executives whereas crying poor in entrance of lawmakers.
This wasn’t a misunderstanding. It was a deliberate, calculated technique that stored shoppers at the hours of darkness whereas insurers and their executives made out like bandits.
David Altmaier: Was the Fox Guarding the Henhouse?
You’d suppose the individual accountable for regulating this trade could be outraged, proper? You’d anticipate them to take quick motion, maintain insurers accountable, and alert the general public.
However David Altmaier did the precise reverse. He stored the report hidden—after which, simply months after leaving workplace, he walked straight by way of the revolving door right into a comfortable job at The Southern Group, considered one of Florida’s strongest insurance coverage lobbying corporations.
That’s proper. The person who was purported to be watching out for Florida owners now works for the very trade he was regulating. And if that’s not sufficient, he simply landed an govt place with a reinsurance commerce group, guaranteeing that his connections within the regulatory world preserve paying dividends.
Now lawmakers are asking: Did Altmaier bury this report to guard his future profession within the insurance coverage trade? The Florida legislature should ask, “What did Commissioner Altmaier know in regards to the secret report, and when did he resolve to bury it?”
Yaworsky’s Function: Why Didn’t He Make the Report Public?
Altmaier could have walked away together with his golden parachute, however what about Michael Yaworsky, the person who took over as Florida Insurance coverage Commissioner?
When Yaworsky stepped into the position in 2023, he had an opportunity to proper this incorrect. As a substitute, he continued the cover-up, failing to reveal the report till pressured to take action by a journalist’s information request.
Why didn’t Yaworsky instantly launch the report when he took over? Did he worry backlash from the highly effective insurance coverage trade? Did he, like his predecessor, have his sights set on a profitable trade job down the highway?
These are questions lawmakers are demanding solutions to at present.
What Questions Will Lawmakers Ask Right this moment?
Right this moment’s listening to is shaping as much as be one of the vital moments in Florida’s insurance coverage regulatory historical past. Count on robust questions like:
- Why was the report hidden?
- Who inside OIR knew in regards to the report?
- Who made the choice to maintain it from the general public?
- What communications befell about suppressing the findings?
- How did insurers get away with these monetary maneuvers?
- Have been they actively deceptive regulators?
- Did the OIR fail in its responsibility to make sure transparency?
- Have been these hidden earnings used to justify pointless price hikes?
- What position did Altmaier’s profession plans play in all of this?
- Did he preserve the report hidden to guard the trade he now works for?
- Have been there discussions between Altmaier and insurers about his post-OIR employment?
- Why didn’t Yaworsky instantly launch the report?
- Did he worry upsetting the insurance coverage trade?
- Was there inner stress to proceed suppressing the findings?
- What reforms are wanted to forestall this from taking place once more?
- Ought to Florida regulation prohibit former insurance coverage commissioners from working as trade lobbyists?
- Ought to insurers be required to reveal all affiliate transactions in a clear and public method?
- Does the OIR want extra vigorous oversight and accountability measures?
Florida owners have endured yr after yr of hovering insurance coverage premiums, with little to no accountability for the insurers cashing in on this disaster. This listening to represents a watershed second—a possibility to demand transparency, expose wrongdoing, and make sure that the folks regulating the trade are literally working for shoppers, not for his or her future employers within the insurance coverage sector.
The stakes couldn’t be increased. If lawmakers do their job at present, this listening to may very well be the catalyst for actual reform—one which stops the limitless cycle of insurance coverage trade insiders regulating themselves whereas Florida owners foot the invoice. I anticipate that this would be the first act of an extended play exposing what actually goes on in Florida’s insurance coverage regulating world. However that is the primary time what goes on behind the “revolving door” of insurance coverage regulators serving to the insurance coverage trade goes to be revealed.
One factor is for certain: The reality is lastly coming to gentle. And for many who labored so laborious to maintain this report buried, that’s acquired to be an uncomfortable feeling.
Keep tuned. As I stated, at present’s listening to is just the start.
Thought For The Day
“Our investigation is an effort to attempt to discover out what the reality is.”
—Senator Lowell Weicker (R-CT), Watergate Committee
