The American Policyholder Affiliation (APA) simply issued a research, Justifiable Grievances: New Evaluation of Regulatory Criticism Information Suggests Excessive Charges of Litigation in Florida Owners Insurance coverage Market are Pushed by Substantial Claims Cost Points, not Frivolous Lawsuits. The report has the next key findings:
Florida owners insurers are the themes of a majority of all confirmed shopper complaints towards owners insurers within the US – 56% in 2022 and 61% in 2021. NAIC regulatory grievance information for 30 Florida insurers reveals that they account for a majority of all closed, confirmed complaints within the US, regardless of having an 8% share of the market. This implies that abuses are rampant within the owners insurance coverage market in Florida, as in contrast with different states. The excessive variety of complaints can be notable as a result of the grievance submitting course of is just not significantly simple or well-advertised in Florida.
Florida owners insurers are much more more likely to be the topic of complaints to regulators than insurers in different sectors in Florida. Owners insurance coverage accounts for 7.5% of all insurance coverage premium {dollars} in Florida, however was the topic of 45% of confirmed complaints in 2019, and 95% of all confirmed complaints in 2020. This implies that abuses are much more widespread within the owners insurance coverage market than different insurance coverage sectors in Florida.
A number of of the businesses that account for a disproportionate variety of the complaints have paid out extreme sums to high executives through the years. The identical firms main the {industry} by way of shopper grievance quantity had been paying executives a number of the largest compensation packages within the nation for years. As an illustration, Common Property & Casualty led all Florida insurers by way of variety of confirmed shopper complaints in 2021 and 2022, accounting for a staggering 17% of complaints within the US in 2021, regardless of having only a 1.5% market share. Common Insurance coverage’s CEO was the best paid property and casualty govt within the nation in 2017, receiving $19.3 million in compensation.
The info set OIR used to investigate litigation charges is just not publicly accessible, so it isn’t doable to copy its calculation, however it’s doubtless considerably inflated. New York and North Dakota are usually not included within the information, and there seems to be uneven reporting within the information.
OIR ignored clear indicators that Florida owners insurers are extraordinarily gradual to settle claims – an indicator that shopper abuses are occurring, which might drive up litigation ranges. Publicly-available abstract tables within the NAIC information that OIR analyzed present that Florida owners insurers are particularly gradual to settle claims in contrast with owners insurers in different states.
Contemplate the supply: Altmaier cashed in on his industry-friendly regulatory expertise as quickly as he resigned as commissioner. Altmaier was appointed director of insurer/reinsurer Aspen Restricted shortly after leaving OIR. Aspen paid non-executive administrators a median of $400,000 in 2022. This might be greater than twice Altmaier’s wage as commissioner, all for part-time board service. He additionally joined the Southern Group, a lobbying agency with many insurance coverage {industry} purchasers, and at the moment has two insurance coverage {industry} purchasers. He resigned his place simply previous to the initiation of a 6-year cooling-off interval, throughout which former regulators can’t foyer their outdated companies, took impact.
Florida insurers are The GOATs of insurance coverage shopper complaints. Not like different states, Florida has a novel regulatory system. It’s the solely state the place two state companies regulate insurance coverage firms and their adjusters. It was not all the time this manner, and the present system is clearly not working. Maybe Florida wants an elected insurance coverage commissioner.
For readers of this weblog, I’d recommend taking a couple of moments to learn by means of the APA report.
Thought For The Day
Information are cussed issues, however statistics are pliable.
—Mark Twain