Florida
Florida insurance scandal has “huge” impact for homeowners
A previously secret study revealing that Florida insurers claimed to be losing money because of major storms while transferring billions of dollars to affiliate and parent companies sheds light on the crisis that has enveloped the state over the past few years.
The 2022 study report, obtained and released by the Miami Herald and Tampa Bay Times last week, shows that insurance companies in the Sunshine State justified massive premium hikes for policyholders as necessary to cover losses at the same time that executives distributed $680 million in dividends to shareholders and diverted billions to affiliates.
“This is the most eye-opening ray of sunlight to pierce the shadowy world of Florida homeowners insurance in years,” Doug Quinn, executive director of the watchdog American Policyholder Association, told Newsweek.
“The impact of this scandal is huge. Florida policyholders have had money taken out of their pockets that they simply cannot afford.”
Joe Raedle/Getty Images
Crucially, the Florida Office of Insurance Regulation (FLOIR) has released only the executive summary of the report, not including the indexes, “even though they appear to have critical information,” Quinn said.
“The release of the entire report, not just the executive summary, is very important,” Birny Birnbaum, executive director of the Center for Economic Justice and a former chief economist at the Texas Department of Insurance, told Newsweek.
“My understanding is that the [Florida] Office of Insurance Regulation will charge some $1,500 for the report, indicating that OIR is not claiming the report is confidential, but effectively making it so with exorbitant costs. The full report is needed to evaluate some of the terms used in the executive summary and to assess the conclusions.”
What Does The Report Reveal?
While insurers’ profits are capped at about 4.5 percent by Florida regulators, the profits of affiliate and parent companies are not. Insurers are known to use these companies to reward their executives and investors in a way that’s open to be abused and has been linked to companies going insolvent before.
Money-shifting is not necessarily illegal for insurers, but the study’s report found that the huge amounts removed from companies by executives violated state regulations. Florida insurers were left so weakened by these transfers of money that they didn’t have the necessary funds to pay claims to policyholders, the study found.
Responding to a request for comment from Newsweek, a spokesperson for Florida state Senator and state Senate President Ben Albritton said they were not aware of the report. The Miami Herald confirmed that Florida lawmakers never saw the report, reportedly because it was not a formal examination report and was left in a “draft” status.
Newsweek contacted the author of the report and FLOIR for comment by email on Thursday. In a statement to the Miami Herald, FLOIR said that the report presents an incomplete picture of insurers’ money but highlights the need for reforms in the sector.
Unaware of these shadowy transfers of money, over the past few years Florida regulators said they tackled the state’s property insurance crisis as best they could, focusing on excessive litigation and widespread fraud in the state market.
For Quinn, this was a mistake.
“Florida legislators were duped into taking away their constituents’ rights to recover their legal fees if their insurer was found guilty in civil court of cheating them,” he said.
“The false narrative that the insurance companies were losing money was used to justify dramatic premium increases and explain away insolvencies that have since been attributed to excessive executive compensation, draining the companies’ assets through affiliates, and just plain bad management.”
While excessive litigation has long been pointed at as one of the main reasons behind Florida’s insurance crisis, Quinn said that the role it played in recent rate hikes has been inflated, “as evidenced by the fact that two years after the passage of pro-insurer/anti-consumer ‘tort reform’ laws, the state of Florida has still among the highest insurance premiums in the country.”
What has been hailed as the stabilization of the Florida market, Quinn said that it’s the return of insurers attracted by the possibility “to take advantage of policyholders with limited consequences.” According to Quinn, there is nothing to suggest any of “the behind-the-scenes dynamics” exposed in the 2022 report have changed.
Photo Illustration by Newsweek
What Impact Did Insurers’ Money-Shifting Have?
For Birnbaum, the money-shifting operated by Florida insurers played a part in the crisis of the past few years, when premiums skyrocketed and availability shrank across the state’s market.
“The major causes of the crisis were thinly capitalized insurers getting bogus financial ratings from Demotech and companies not being able to sustain catastrophe losses because they had little capital and relied heavily on reinsurance,” he said.
“When reinsurance prices skyrocketed and supply shrank, these insurers’ business models failed.
The problems in the Florida market, according to Birnbaum, stemmed from huge catastrophe exposure and “the Legislature letting insurers do what they want in terms of cutting coverage and requiring massive deductibles.
“The model of massive reinsurance coupled with massive funds siphoned to affiliates played a role because several of these insurers failed.”
Quinn believes that the impact of the money-shifting revealed in the 2022 report was especially devastating for seniors on a fixed income and working-class families.
“Many people have left the state citing unaffordable insurance premiums as the cause. This has even had a dramatic impact on the Florida real estate market, which some analysts are predicting is on the verge of collapse,” he said.
“To add insult to injury, not only Florida citizens are being asked to pay among the highest insurance premiums in the nation, but Florida insurance companies have among the worst claims-paying history, with a significant percentage of consumer complaints against insurance companies in the nation being against Florida insurers.”
Have Things Changed Since The 2022 Report?
While Florida regulators have said that things are different compared to the time referred to in the 2022 report, with more oversight and regulation in place, Quinn is skeptical.
“You can have all the laws and regulations you want, but if the state regulatory and law enforcement agencies do not enforce them, they have no use, and bad actors will abuse the system,” he said.
“To be clear, the state of Florida regulatory and law enforcement agencies are weak on insurance.”
This weakness, according to Quinn, has been the untold story of the state’s insurance crisis of the past few years.
“The crisis could not have happened unless it was allowed to do so by those whose responsibility it is to protect the citizens of Florida from these types of underhanded manipulations,” Quinn said.
In recent months, Florida regulators have welcomed Citizens’ depopulation efforts and celebrated the approval of new insurers to enter the state’s market as signs that tort reform had worked, and the market is stabilizing. But to Birnbaum, “the claims by the governor [Ron DeSantis] and OIR that the ‘market is stabilizing’ are a sham.”
According to the economist, “the new entrants to the market are all using this same approach of getting policies from Citizens—with no acquisition costs—and relying massively on reinsurance and services from affiliates, just as outlined in the executive summary.”
Birnbaum added: “The new entrants are using a tried-and-true method to mint money with no risk by siphoning massive percentages of premium to affiliates. Florida consumers have not seen any meaningful rate relief. When reinsurance costs jumped, so did the cost of primary insurance. Those costs have not come down and neither have premiums. If litigation was truly the cause of skyrocketing premiums, then why haven’t premiums dropped significantly with ‘tort reform?’”
According to NerdWallet’s latest data, homeowners insurance costs an average of $2,625 a year for $300,000 worth of dwelling coverage in Florida, higher than the national average of $1,915.
The answer for Birnbaum and Quinn is that litigation was never a major driver of insurance premiums in Florida, “catastrophe risk and insurers excluding coverage were the reasons,” Birnbaum said.
SUNRISE, Fla. — Former major league shortstop Rafael Furcal is facing felony charges in South Florida, authorities said.
The former All-Star turned himself in at the Broward County jail Wednesday and was released on bail a short time later, according to court records. He’s charged with aggravated battery with a deadly weapon and throwing a missile into a public or private dwelling or vehicle.
Court records didn’t list a defense attorney for Furcal. His former agent, Paul Kinzer, declined to comment on the charges and did not provide a way to reach Furcal directly.
The Sunrise Police Department issued the warrant for Furcal’s arrest Monday, but it didn’t immediately release details about what led to the criminal charges.
Furcal, 47, started with the Atlanta Braves in 2000, followed by stints with the Los Angeles Dodgers and the St. Louis Cardinals. He was with the Cardinals in 2011 when they beat the Texas Rangers in the World Series. He finished his professional baseball career with the Miami Marlins in 2014.
Furcal completed the 12th unassisted triple play in MLB history on Aug. 10, 2003, while playing for the Braves against the Cardinals.
Florida
Florida Panthers one win from advancing to Stanley Cup conference final after beating Maple Leafs
Can the Florida Panthers really go back-to-back?
With a dominant roster and playoff experience, the Panthers are poised to make a strong run at back-to-back Stanley Cup titles.
Sports Pulse
- Sergei Bobrovsky’s shutout streak ended late in the third period, but he still made 32 saves.
- Depth players like Kulikov, Boqvist, Mikkola, and Greer scored key goals for Florida.
The Florida Panthers shut the Toronto Maple Leafs down – again – and are one win away from returning to the Stanley Cup conference finals.
Sergei Bobrovsky came within 1:06 of securing back-to-back shutouts to lead the Panthers to a 6-1 Game 5 victory over the Maple Leafs in Toronto on May 14. Florida will take a 3-2 lead back to Sunrise with a chance to close the series on May 16.
Bobrovsky went 143:25 without giving up a goal — starting late in the third period of Game 3 — before his skid was snapped. But that was not before another dominant 32-save performance.
“We’re definitely happy with where we’re at, but we’re also humbled and focused,” Bobrovsky said. “We just have to focus on the next shift, the next moment, and get ready.”
Aaron Ekblad opened the scoring with 5:22 to go in the first period. He fired a wrist shot off a feed from Sam Reinhart.
Dmitry Kulikov extended Florida’s lead to two goals 6:08 into the second period. His slap shot from the point deflected off the stick of Toronto forward Scott Laughton and past Joseph Woll.
Jesper Boqvist made it 3-0 by tapping home a feed from Reinhart off the rush with 9:55 to go in the second period. Niko Mikkola extended that lead to four goals with a slap shot off the rush with 5:59 to go in the middle frame.
A.J. Greer tacked on a fifth Panthers goal 6:23 into the third period, tapping home a rebound after a Jonah Gadjovich shot hit Jake McCabe in the face. Sam Bennett added a sixth goal 9:10 into the third period with a quick wrist shot on a power play.
”At the end of the day, the job’s not done,” Ekblad said. “There’s still a lot of work to do — to go home, recover and have our best game at home in Game 6.”
Here are three takeaways from Florida’s Game 5 victory:
Jesper Boqvist steps up in Evan Rodrigues’ absence
With Evan Rodrigues out of the lineup after taking a high hit from Oliver Ekman-Larsson in Game 4, the Panthers opted to go with Jesper Boqvist over rookie Mackie Samoskevich on the first line next to Sam Reinhart and Aleksander Barkov.
Boqvist stepped up and notched a goal and an assist despite going 25 games without a point and 39 games without a goal to finish the regular season and in the first seven games of the postseason.
Florida coach Paul Maurice trusted Boqvist with the assignment because of his defensive acumen and his versatility and he delivered. He helped set up Florida’s first goal by staying aggressive on the forecheck and keeping the puck in the offensive zone before Ekblad eventually fired the shot that gave the Panthers the lead. He flashed his speed off the rush to notch his first goal since Jan. 25.
”He’s just got so much speed and he battles out there,” Reinhart said. “Any time you can get those legs, especially in a tight-checking series like this, it’s going to be a positive. He stepped in, was very comfortable and he made some big plays to help us tonight.”
Panthers depth continues to shine in big ways
Through the first 10 games of the postseason, the Panthers have already broken a franchise record with 17 different players scoring in this postseason run — and their Game 5 performance was a big sign of that.
Florida was able to beat Toronto without its usual suspects completely taking over the game. Four players — Kulikov, Boqvist, Mikkola and Greer — all scored their first goals of the postseason. The Panthers got three of their goals from defensemen and had all four forward lines on the ice for at least one of the goals.
“They don’t get on the magazines,” Maurice said. “It’s special when those guys score.”
The Panthers have enough talent to where not one player has to take over the game on a day-to-day basis, and in Game 5, it was the entire roster that pitched in to steal a game in Toronto.
Florida continues to slow down Toronto’s rush attack
Ever since the midway point of Game 3, the Panthers have started to play their game and it has flipped the series on its head. Florida has gotten to its forecheck, stabilized its gap game on transition and has found the answer to slowing down the speedy Maple Leafs.
Game 5 was a perfect example of that. The Panthers held the Maple Leafs to just eight high-danger shots and one shot off the rush. Florida held onto the puck for the majority of the game and continued to hem Toronto in its own end and it led to an onslaught.
”I think they did a great job,” Bobrovsky said. “They played a hard gap game. Very simple, struck hard as a unit — all five guys. So, this was a good one.”
Impact of 2022 Florida insurance reforms
Florida lawmakers made it harder to sue home insurance companies and offered those companies additional state-backed reinsurance in 2022. How is that impacting the market now, after the 2024 hurricanes? FOX 13’s Craig Patrick reports.
TAMPA, Fla. – As Florida’s homeowners dispute insurance denials from last year’s hurricanes, state reforms intended to improve service and bring down our bills are coming under scrutiny.
The backstory:
In 2022, the Florida Legislature and Gov. Ron DeSantis made it harder to sue home insurance companies and offered those companies additional state-backed reinsurance – state money to subsidize the private market.
Before this passed, some lawmakers doubted subsidies for the insurance companies and making it harder for consumers to sue them would help consumers.
“It’s corporate welfare. It’s only helping big businesses, and my constituents are not going to feel any relief as a result of it,” said Michael Grieco, who served as a Democratic state representative from 2018-22.
READ: Home insurance nightmares continue months after 2024 hurricanes
Then in 2023, then-presidential candidate Donald Trump claimed DeSantis delivered the biggest insurance bailout in history and crushed Florida homeowners whose houses were destroyed. Trump claimed Florida’s insurance commissioner did nothing, while Floridians’ lives were ruined.
For context, Trump and DeSantis were running against each other at the time.
Dig deeper:
State lawmakers said it would take more time for their changes to pay off. They said we would need to wait a year and a half to see the results.
However, homeowners reported their premiums continued to rise through 2023.
For example, in Pinellas County, Dave Lesko’s home insurance bill increased from $5,500 to $7,500 in 2023, after he had renovated and bolstered it with stronger windows. Then in 2024, his bill rose to $17,000.
Dave Lesko says his insurance bill rose to $17,000 in 2024. It was $5,500 in 2022 and $7,500 in 2023.
“I thought so at first I read the number wrong. I had to get my glasses and double-check, but it’s correct and it’s actually a 120% increase from last year,” Lesko said.
Then Florida took hits from Hurricanes Debby, Helene, and Milton.
And Weiss Ratings found a sharp increase in damage claim denials compared to prior storms in prior years.
“Some of the bigger providers in the state have denial rates close to 50%, so half of the claims are being denied,” said Weiss Ratings founder Dr. Martin Weiss.
Weiss Ratings shows 14 property insurers in Florida closed more than half their claims in 2024 with no payments. Weiss notes that does not include claims that fall outside the policy’s coverage (like mistakenly filing flood claims on a home policy).
Florida home insurance: Reviewing the impact on state reforms
In Washington, U.S. Republican Senator Josh Hawley flagged the rise in denial rates in calling for a congressional investigation.
The Republican Governor of Louisiana, Jeff Landry, cited Florida’s reforms as a model for what not to do.
“They tried wholesale tort reform that insurance companies said would lower rates in Florida and today, policyholders in Florida struggle to get the very claims paid on the policies they paid for,” Gov. Jeff Landry said.
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The other side:
Florida’s insurance commissioner disagrees. Michael Yaworsky notes more insurance companies are doing business in Florida. He said rates have leveled off in Florida, and some are going down.
“We are seeing that stability has emerged throughout the marketplace,” Yaworsky said.
The Source: Information for this story was gathered by FOX 13’s Craig Patrick.
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