Florida Lawmaker Acknowledges Anti-Shopper Legal guidelines Handed Make Insurance coverage Firms a Nice Funding | Property Insurance coverage Protection Legislation Weblog


Are you able to think about the scene within the Florida legislature the place insurance coverage business lobbyists have been presenting drafts of latest legal guidelines to Republican lawmakers? It should have gone one thing like this:

‘These legal guidelines will permit us to not pay claims, or if we’ve to, we can have much more leverage to pay much less as a result of no one will be capable of afford a lawyer. And, in the event that they do rent a lawyer and sue, it would value them much more, and we’ll make them undergo extra hoops that exist nowhere else within the nation. We’ll take away virtually any likelihood of dangerous religion lawsuits so we are able to deny much more claims. We is not going to have to supply as a lot protection. And one of the best, we’ll get these legal guidelines handed and never promise to decrease any premiums. Certainly, the charges might go up!’

It doesn’t take a monetary genius to determine that taking individuals’s cash and by no means paying what’s owed on insurance coverage claims will be very worthwhile. The geniuses who handed these legal guidelines perceive that primary idea a lot that they’re now touting Florida as an incredible place for insurance coverage firms to do enterprise, as famous within the above video and in an article by Lawrence Mower, Amid Florida Insurance coverage Disaster, Buyers And a Senator See Alternative:

Lured by the nation’s highest premiums and new legal guidelines making it tougher to sue insurance coverage firms, traders see a chance in Florida’s beleaguered insurance coverage market. Present and former state officers and different observers mentioned they’re receiving common inquiries from potential traders seeking to make a revenue.

‘As quickly as we have been performed with the final vote in session, I had a few individuals … together with legislators, asking if I wished to spend money on an insurance coverage firm,’ Sen. Jason Pizzo, D-Hollywood, informed the state’s insurance coverage commissioner final month.

That features state Sen. Joe Gruters, R-Sarasota, who has pitched fellow lawmakers on investing in a householders insurance coverage firm that tasks a 165% return on funding over 5 years.

… However Florida-based insurance coverage firms make use of uncommon monetary constructions that may permit executives to extract appreciable earnings from householders’ premiums.     

A visitor weblog, Main Florida Property Insurers Paid Out Extreme Govt Compensation Packages Dividends For Years, written by Kevin Connor for the American Policyholder Affiliation, famous that:

For years, property insurance coverage firms in Florida paid out extreme govt compensation packages and inventory dividends, basically transferring earnings into insiders’ pockets as an alternative of getting ready for future years of adversarial underwriting experiences as most insurers do.

… One of many few ultimate experiences accessible on householders insurance coverage firms is concerning the failure of Sunshine State Insurance coverage Firm in 2014. The corporate reported that on account of an ‘accounting error,’ it didn’t have the required reserves and was positioned into receivership. Sunshine State was later discovered to have shifted hundreds of thousands of {dollars} in funds to its mum or dad firm and subsidiaries, in addition to massive govt bonuses whereas the corporate was on the verge of insolvency. An fascinating element of the required insolvency experiences is that the division is required to do an evaluation of the effectiveness of the Workplace of Insurance coverage Regulation’s oversight of insurance coverage firms which have later failed. Some have speculated that that is the explanation why these experiences seem like suppressed.  

Little consideration has been paid to this side of Florida’s insurance coverage market: Insurance coverage executives lined their pockets for years as an alternative of working the businesses responsibly and increase enough reserves and at the moment are pointing the finger at shoppers, attorneys, and roofers. We have now seen questionable statistics typically repeated to help this principle, however nobody has produced validation or verification.

Florida has an insurance coverage disaster as a result of Florida’s insurance coverage regulators and most of its Republican lawmakers are in mattress with insurance coverage lobbyists, as famous in How the Historical past of Insurance coverage Repeats Itself and Is Stuffed with Fashionable Classes Which Have to Be Acted Upon. The Republican legislature, authorities officers, and insurance coverage regulators being in mattress with the insurance coverage foyer will not be a secret. Donald Trump has known as them out on this:1   

What can we do? Comply with former President Trump’s recommendation—clear the swamp. Insurance coverage lobbyists and the insurance coverage business run Florida’s insurance coverage market. Till we get them out of the regulation and lawmaking enterprise, this can proceed to be a large number.

Thought For The Day     

Don’t spend main time on minor issues. For those who discover that you just’re spending an excessive amount of time on the insignificant, it’s a must to clear home.

—Jim Rohn

1 Donald Trump and Chip Merlin Agree—Ron DeSantis and Florida Republican Management Have Offered Out to Insurance coverage Firm Lobbyists, Property Ins. Protection Legislation, Mar. 16, 2023.


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