One thing large 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 Disguise Income.
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 practically three years. A report that, if launched on the time, might have uncovered how insurance coverage executives and their affiliated corporations have been pocketing billions whereas Florida householders have been drowning in skyrocketing premiums. Those self same insurance coverage executives, their lobbyists, and David Altmaier have been telling Florida’s legislators of the good monetary must overhaul insurance coverage policyholder safety legal guidelines and blaming lawsuits as the explanation why insurers couldn’t earn cash in Florida.
As an alternative of guaranteeing transparency, former Florida Insurance coverage Commissioner David Altmaier and his successor, Michael Yaworsky, saved the report hidden. It solely got here to gentle after a journalist, refusing to take “no” for a solution, pried it free by means of a Freedom of Data Act request.
Now, lawmakers are demanding solutions, and in the present day’s listening to is the primary actual try to tug again the curtain on what could also be one of the vital 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 stuffed with numbers solely an actuary might love. The report paints a damning image of how Florida’s home insurance coverage corporations have been enjoying a monetary shell sport—one which allowed them to assert losses publicly whereas funneling billions into affiliated corporations behind the scenes.
Listed below are the massive takeaways from the report:
- Insurance coverage corporations claimed they have been shedding cash—however their affiliated service corporations raked in $14 billion in income over three years.
- Managing Basic Brokers (MGAs), claims corporations, and different affiliated entities have been charging “charges” as excessive as 63% of premiums—a determine that defies logic and equity.
- Some corporations have been forgiving or waiving charges to create the phantasm of economic misery—doubtlessly deceptive regulators and lawmakers into approving large fee hikes.
- Insurers have been paying out enormous dividends to mother or father corporations and executives whereas crying poor in entrance of lawmakers.
This wasn’t a misunderstanding. It was a deliberate, calculated technique that saved customers at nighttime whereas insurers and their executives made out like bandits.
David Altmaier: Was the Fox Guarding the Henhouse?
You’d suppose the individual in command of regulating this trade can be outraged, proper? You’d count on them to take instant motion, maintain insurers accountable, and alert the general public.
However David Altmaier did the precise reverse. He saved the report hidden—after which, simply months after leaving workplace, he walked straight by means 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 imagined to be watching out for Florida householders 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 maintain 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 concerning the secret report, and when did he resolve to bury it?”
Yaworsky’s Function: Why Didn’t He Make the Report Public?
Altmaier might 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 function in 2023, he had an opportunity to proper this mistaken. As an alternative, he continued the cover-up, failing to reveal the report till compelled to take action by a journalist’s information request.
Why didn’t Yaworsky instantly launch the report when he took over? Did he concern 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 in the present day.
What Questions Will Lawmakers Ask Right now?
Right now’s listening to is shaping as much as be one of the vital crucial moments in Florida’s insurance coverage regulatory historical past. Anticipate powerful questions like:
- Why was the report hidden?
- Who inside OIR knew concerning the report?
- Who made the choice to maintain it from the general public?
- What communications happened 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 obligation to make sure transparency?
- Have been these hidden income used to justify pointless fee hikes?
- What function did Altmaier’s profession plans play in all of this?
- Did he maintain 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 concern upsetting the insurance coverage trade?
- Was there inside stress to proceed suppressing the findings?
- What reforms are wanted to forestall this from occurring once more?
- Ought to Florida legislation 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 householders have endured yr after yr of hovering insurance coverage premiums, with little to no accountability for the insurers taking advantage of this disaster. This listening to represents a watershed second—a possibility to demand transparency, expose wrongdoing, and be certain that the folks regulating the trade are literally working for customers, not for his or her future employers within the insurance coverage sector.
The stakes couldn’t be increased. If lawmakers do their job in the present day, this listening to could possibly be the catalyst for actual reform—one which stops the limitless cycle of insurance coverage trade insiders regulating themselves whereas Florida householders foot the invoice. I count on 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 positive: The reality is lastly coming to gentle. And for many who labored so exhausting to maintain this report buried, that’s received to be an uncomfortable feeling.
Keep tuned. As I stated, in the present day’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