New legislation is intended to acknowledge that insurance companies have not yet faced heavy regulation.
As the homeowners’ insurance industry in Florida continues to scramble in crisis mode, lawmakers have introduced a new insurer accountability strategy as a part of a broader effort to control skyrocketing premiums and company insolvencies.
The bill would raise fines for insurance companies that have been using bad practices.
The insurer accountability bill would put higher fines in place for insurance companies with bad behaviors. The companies will also be required to do more information reporting to the state and will need to follow claims handling best practices. Furthermore, insurance companies will no longer be permitted to drop a policyholder until the completion of repairs to that policyholder’s home.
“If there’s bad actors out there, we’re going to hold them accountable,” said Florida Senator Travis Hutson (R-Elkton), the sponsor of the bill. According to Hutson, this bill is designed to bring the state a “healthy balance” of insurance market oversight.
Last week, a Senate committee voted in favor of the insurer accountability bill.
That said, as is to be expected, industry lobbyists were present and were heard before the vote on the bill.
“(We) just want to ensure that we’re truly going after the bad actors and not the entire insurance industry as a whole,” said Florida Chamber of Commerce senior director Carolyn Johnson. The chamber includes insurance companies among its members.
The bill places the spotlight on the light regulation insurance companies have faced in the state until now. Insurance companies in the state are used to having their rate filings approved and have had regulators on their side in making it more challenging to file a lawsuit against them. The insurer accountability bill will change that trend.
David Altmaier was the state insurance commissioner until last December, at which time he became an industry lobbyist and joined a reinsurance firm’s board of directors. That said, Mike Yaworsky, who replaced him in the Florida Office of Insurance Regulation, said he’s more interested in holding insurance companies accountable.
“We’ve got a new sheriff in town … who really wants to go after these guys,” said Hutson about Yaworsky. “Some of this language came directly from him, where he said, ‘I need more tools in the toolbox.’”
