A recent study obtained by the Times/Herald revealed that while Florida insurance companies claimed to be losing money following hurricanes Irma and Michael, their parent companies and affiliates were making billions of dollars. The report, released after a two-year wait for public records, provided an in-depth look into the finances of Florida’s homeowners insurance market.
The study found that as companies were experiencing financial difficulties, executives were diverting billions to affiliate companies and distributing millions in dividends to shareholders. In some cases, executives were removing so much money that they were in violation of state regulations, potentially leaving insurers financially weaker and unable to pay claims.
Despite the findings, the report was never shared with state lawmakers, who instead focused on legal reforms making it harder to sue insurers. While regulators have pushed for more oversight of affiliate companies in recent years, critics argue that more needs to be done to ensure financial arrangements are fair and reasonable.
The study highlighted the complex web of financial relationships between insurance companies and affiliates, with some executives being among the highest-paid in the nation. Such arrangements have been linked to insolvencies in the past, and regulators are now advocating for greater scrutiny and clearer definitions of what constitutes fair and reasonable fees.
Moving forward, regulators are seeking legislative changes to address these issues, including requirements for fees to be paid in dollar amounts rather than percentages. The goal is to ensure that financial arrangements are transparent and in the best interest of policyholders.
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