Yesterday’s testimony earlier than the Florida Home Insurance coverage & Banking Subcommittee ripped the duvet off a narrative that’s been brewing for years: the Workplace of Insurance coverage Regulation (OIR) underneath David Altmaier had a accomplished, paid-for, red-flag-waving report about insurer affiliate transactions exhibiting a whole bunch of thousands and thousands of hidden income for the insurance coverage {industry} — and easily selected to disregard it.
Jan Moenck, the skilled from Threat & Regulatory Consulting who authored the “draft” Insurer Affiliate Research, testified underneath oath that the report was full. She made clear that the “draft” label was a normal placeholder so OIR may request minor edits, however in her skilled opinion, her findings and suggestions have been ultimate. Moenck stated she adopted up a number of occasions with OIR after delivering the report however acquired no request for adjustments, no request for additional work, and — most tellingly — no additional communication. OIR paid her invoice in full. That was the top of it.
The end result? Legislators, who spent the 2 years debating the necessity for large insurance coverage reforms, have been stored utterly in the dead of night a couple of examine that would have modified the complete dialog.
One legislator flatly stated that the OIR lied to them within the final listening to. And let’s be clear: the duty sits squarely on former Insurance coverage Commissioner David Altmaier’s shoulders. Altmaier, who left the publish in 2022 to change into a lobbyist for insurance coverage firm pursuits, had the report sitting in his inbox whereas lawmakers scrambled to grasp skyrocketing premiums and insurer insolvencies. His successor, Michael Yaworsky, solely took over after Altmaier’s departure.
The political optics are brutal. Whereas householders misplaced protection and paid premiums by the nostril, Florida’s high insurance coverage regulator had a professionally ready report hinting at income being siphoned off by affiliate corporations, MGAs, TPAs, and reinsurers — and did nothing with it.
However as we speak’s listening to didn’t simply finish with finger-pointing. Florida Home management promised motion: The Chair of the committee introduced that the Florida Home would rent the perfect forensic accountants accessible to audit the affiliated firm transactions themselves. As a substitute of trusting the OIR, the Florida Home of Representatives is now doing the job insurance coverage regulators didn’t do.
Which means insurers, together with their captive MGAs, TPAs, and affiliated reinsurers, are about to get a full monetary examination — this time with public accountability.
Lawrence Mower was the investigative journalist who uncovered the report by a freedom of knowledge request. His article about yesterday’s listening to, Florida Regulators Didn’t Comply with Up on Insurance coverage Income Research, Writer Says, reported that this investigation goes to have main implications for the way Florida regulates property insurers shifting ahead. I agree.
If this report had seen the sunshine of day when it was accomplished — again when lawmakers have been advised that they had “no alternative” however to cross insurance coverage industry-friendly reforms — the insurance coverage debate and laws in Florida might need seemed very totally different. It begs the query of whether or not Altmaier was already performing as a lobbyist for the insurance coverage {industry} earlier than he formally left his place as insurance coverage commissioner.
Keep tuned. This investigation is taking time. However the subsequent few chapters of this investigation promise to be much more explosive.
For many who didn’t see the final listening to, I’ve hooked up a replica of the transcript so you’ll be able to see precisely what former insurance coverage commissioner David Altmaier stated concerning the buried report.
Thought For The Day
“It’s not the crime that will get you—it’s the cover-up.”
– Richard Nixon