(This story was updated to add new information.)
Eight Florida property insurers are going to have to cough up more than $2 million in fines for misconduct because they didn’t follow required procedures for paying storm victims for damages after hurricanes Ian and Idalia took their tolls.
And there may be more fines coming, according to a Sept. 2 news release from state regulators charged with overseeing insurers’ conduct.
The companies and their fines are:
-
American Coastal Insurance Co. and American Mobile Insurance Exchange and Clear Blue Insurance Co., $400,000 each.
-
The state’s 16th largest insurer, Monarch National Insurance Co., $325,000.
-
Tower Hill Prime Insurance Co., $250,000.
-
TypTap Insurance Co., $150,000.
-
Centauri Specialty Insurance Co., $100,000.
-
Sutton National Insurance Co., $50,000.
Representatives of most of the fined companies could not immediately be reached for comment, but a Monarch representative said a now-failed insurer, FedNat, was overseeing its claims during the period of the infractions and that the controlling company, Hale Partnership Managing Agency, hired its own staff as soon as it became aware of the problems.
FedNat Insurance Co. was among those that went insolvent as the Florida property insurance market teetered on the edge of disaster. The company was ordered into receivership the day before Hurricane Ian hit, a company news release shows, but their underwriting arm remained active until 2023, according to a Monarch spokesperson.
“Hale Partnership saw the same problems as the (state regulators’) market conduct exam in real time almost two years ago and acted immediately on behalf of policyholders,” said Steven A. Hale, chairman of Monarch. “Hale Partnership is pleased that its view of the required excellence to serve policyholders is shared by (state officials) as Floridians deserve only the highest of standards in customer service.”
Tightened regulations for insurers
This is among the first set of findings holding insurers to tightened regulations — and increased state oversight — because of a package of laws passed in 2022-23 that also diminished policyholders’ rights to sue their insurers over disputed claims.
Unlike litigation costs, these fines will not increase policyholders’ costs but ensure that the companies are backing policyholders as promised, state regulators say.
Wind or water damage? Ian court cases show what policyholders face in challenging insurers
The announcement comes amid reports that insurers are having their first underwriting profits since 2015, following a slew of insurers going insolvent between 2019 and 2023 and others reducing their Florida footprints even as Floridians pay some of the highest property insurance premiums in the country.
“Capital is pouring in, and the market is stabilizing, but … it is important that consumers have confidence that they are getting what they pay for,” state Insurance Commissioner Mike Yaworsky said in a news release. “The Office of Insurance Regulation stands ready to … make sure Floridians are being treated fairly, especially after hurricanes.
“We want companies to thrive, but companies must also be worthy of doing business in our state,” Yaworsky added.
According to regulators, infractions included failures such as:
-
Paying or denying claims within 90 days of the claim being filed.
-
Paying interest when warranted.
-
Acknowledging receipt of claims in a timely manner.
-
Including disclosure statements when providing estimates on damage claims.
-
Sending the Homeowners Claims Bill of Rights to policyholders after a claim.
In one examination, the Office of Insurance Regulation’s Market Conduct Unit identified error rates of more than 60% for Hurricane Ian and more than 80% for Hurricane Idalia in failing to send disclosure statements, which is when the insurer must tell the claimant exactly what is covered under the policy, the news release said.
Industry: Most insurers are following the law
These failures don’t represent most of the hundreds of thousands of claims that occur when a major storm hits Florida, according to Mark Friedlander, senior director of the insurance industry-funded Insurance Information Institute.
“The role of the property/casualty industry is to be a financial first responder to help their customers recover from catastrophes as quickly as possible,” Friedlander said in an email. “When they don’t (follow Florida’s insurance regulations), they need to be held accountable, which resulted in the fines announced today by Commissioner Yaworsky.”
Both Republicans and Democrats dissatisfied with status quo
Still, the latest legislative session began this year with both Republicans and Democrats complaining of widespread reports of insurers not making good on storm damage claims from the 2024 line of hurricanes Debby, Helene and Milton, and constituents battered by escalating costs despite the reforms.
Some lawmakers in committee hearings held up victims of 2022’s Hurricane Ian still waiting to get paid for their storm damage and left with little recourse to hold insurers accountable. Changes to tort law prohibited attorney fees from being added to a litigated settlement, vastly diminishing the incentive for attorneys to take the cases.
New CFO pledge
The changes were undertaken as necessary to shore up an insurance market teetering on the brink of collapse, the legislative majority agreed. The state’s vulnerability to hurricanes, the excessive rate of litigation resulting from disputed claims and financial markets spooked by both factors were driving the financial calamity.
Now, the number of people suing their insurers has dropped and rates have stabilized, but polling shows the high cost of property insurance remains as a top concern among Floridians.
Floridians will get the protection they are paying for, the state’s new chief financial officer pledged in the release. It also cited stepped-up enforcement in individual cases. The insurance regulation office’s Market Conduct Unit has secured $8 million in restitution from insurers owed to policyholders during the 2023-24 fiscal year, the release said.
“These fines are proof positive that we are committed to holding them accountable,” said Blaise Ingoglia, who Gov. Ron DeSantis appointed to be CFO in July. “Floridians can rest assured that I am actively watching insurers, and I will not hesitate to enter the fight on behalf of consumers and policyholders. With peak hurricane season approaching, it is more important than ever to ensure that insurance companies are keeping their promises to their customers.”
This is a breaking news story. Check back for updates.
Anne Geggis is the insurance reporter atThe Palm Beach Post, part of the USA TODAY Florida Network. You can reach her at ageggis@gannett.com. Help support our journalism. Subscribe today
This article originally appeared on Palm Beach Post: Florida regulators fine insurers more than $2 million for ‘misconduct’
