One thing huge 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 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 practically three years. A report that, if launched on the time, might have uncovered how insurance coverage executives and their affiliated corporations 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 nice monetary must overhaul insurance coverage policyholder safety legal guidelines and blaming lawsuits as the explanation why insurers couldn’t earn money in Florida.
As an alternative of making certain 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 unfastened 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 corporations had been enjoying a monetary shell recreation—one which allowed them to assert losses publicly whereas funneling billions into affiliated corporations behind the scenes.
Listed here are the large takeaways from the report:
- Insurance coverage corporations claimed they had been shedding cash—however their affiliated service corporations 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 corporations had been forgiving or waiving charges to create the phantasm of economic misery—doubtlessly deceptive regulators and lawmakers into approving large charge hikes.
- Insurers had been paying out large dividends to father or mother corporations and executives whereas crying poor in entrance of lawmakers.
This wasn’t a misunderstanding. It was a deliberate, calculated technique that saved shoppers at midnight whereas insurers and their executives made out like bandits.
David Altmaier: Was the Fox Guarding the Henhouse?
You’d assume the individual accountable for regulating this business can be outraged, proper? You’d anticipate them to take fast 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 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 imagined to be watching out for Florida owners now works for the very business he was regulating. And if that’s not sufficient, he simply landed an government place with a reinsurance commerce group, making certain 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 business? The Florida legislature should ask, “What did Commissioner Altmaier know concerning the secret report, and when did he determine to bury it?”
Yaworsky’s Function: Why Didn’t He Make the Report Public?
Altmaier could have walked away along 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 flawed. As an alternative, 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 business? Did he, like his predecessor, have his sights set on a profitable business job down the street?
These are questions lawmakers are demanding solutions to at present.
What Questions Will Lawmakers Ask Right now?
Right now’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 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?
- Had been they actively deceptive regulators?
- Did the OIR fail in its obligation to make sure transparency?
- Had been these hidden earnings used to justify pointless charge hikes?
- What position did Altmaier’s profession plans play in all of this?
- Did he preserve the report hidden to guard the business he now works for?
- Had 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 business?
- Was there inside strain 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 business 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 benefiting from this disaster. This listening to represents a watershed second—a possibility to demand transparency, expose wrongdoing, and be certain that the folks regulating the business are literally working for shoppers, not for his or her future employers within the insurance coverage sector.
The stakes couldn’t be larger. If lawmakers do their job at present, this listening to might be the catalyst for actual reform—one which stops the limitless cycle of insurance coverage business 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 business 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 bought to be an uncomfortable feeling.
Keep tuned. As I mentioned, 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
