Florida can’t outrun ‘duh’ on property insurance reform – InsuranceNewsNet

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Florida has a home insurance problem. Rates are already high and heading up. The issue is so pressing that the governor reminded lawmakers to Tallahassee for an extraordinary session which ended last Friday. There is no single solution to this complex challenge, but a vein to be tapped: digging deep into why so many insurance companies have failed to Florida recently. “Well, duh,” you might say. “It’s too obvious.” Maybe so, but unfortunately on this important issue, Florida didn’t get past “duh”.

The last hurricane hit Florida in 2018. Since then, seven property insurers have failed, four of them in the last 13 months. A few others are on precarious financial footings. As required by law, the Financial Services Department writes a report on each insurance company that fails. But like the Times’ Laurent Reaper reported, the department often does not release these financial autopsies until years after the company goes bankrupt. The Time asked for reports on five of the insurers that had failed since 2014. The department had only completed one. The framers designed the WE Constitution in 116 days. Stephen King wrote “The Shining” in less than six weeks. Can’t the state publish a report on an insolvent insurance company in less than a year?

Florida Insurance Consumer Advocate Tasha Carter said last year that she was unaware of the reports, and her spokesperson did not recently respond to questions about whether that had changed. It’s true. The state’s insurance consumer advocate — whose website says the office is ‘committed to finding solutions to insurance issues facing Floridians’ — hadn’t read any of the reports last year. who might provide clues on how to complete this mission. We would like to think that it is simply a lack of awareness, not indifference or negligence.

It’s not about pushing paper; the reports provide valuable information on how to fill the gaps and where the state needs to better enforce existing laws. For example, the report on JacksonvilleThe failure of Sunshine State-based Sunshine State Insurance Company showed how the CEO received a $200,000 bonus months before the liquidation of the company. Sunshine State’s parent company and sister companies have also taken millions of dollars out of the business through written and “verbal” agreements, including $708,830 in two separate oral agreements in the 10 months prior to the company’s liquidation, according to the report. Florida the law requires that these agreements be in writing and approved in advance by the Financial Regulatory Office. One wonders what valuable nuggets about other failing companies lie in the unpublished reports.

With a better understanding of why insurance companies fail, legislators could adopt better policies and insurers could avoid the pitfalls that have ruined their competitors. As things stand, chess is taking a bite out of our wallets. Orlando-based St. John’s Insurance Company sank this year, which forced the Florida Insurance Guarantee Association to settle the company’s outstanding debts. The 1.3% fee applies to all policies sold in Floridafrom home insurance to flood and malpractice policies, Time reported. It’s just the cost of a business going bankrupt.

The property insurance crisis isn’t just about reports of failing businesses – rampant litigation, reinsurance costs and building requirements top many lists. But writing and distributing these reports is a low-hanging fruit, inexpensive and easy to do. On this important question, let’s at least get past “duh”. — Tampa Bay Weather

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