At the state capital, legislative session kicked off March 4 as leaders in the Florida House and Senate, as well as Gov. Ron DeSantis, presented their priorities and larger issues facing the Sunshine State. 

For legislators, a return to Tallahassee for a 60-day session comes on the heels of a bombshell report regarding the state’s insurance crisis and how executives likely caused it by diverting hundreds of millions to shareholders and billions of dollars to affiliate companies between 2017 and 2019. As a result, it left insurers in a weak financial position — some were even unable to pay claims.

The 2022 report commissioned by the Florida Office of Insurance Regulation was never given to legislators, according to a report by The Tampa Bay Times. OIR told the Times the study was not given to lawmakers because it was “not a formal examination report.” It was produced months before lawmakers met in emergency legislative sessions in 2022 and left in a “draft” status.

In his address to the House, new Speaker Danny Perez, a Republican from Miami, was met with applause when he said the Insurance & Banking Subcommittee will be digging into the matter.  

“They (the subcommittee) will have access to the full range of tools — including issuing subpoenas, putting witnesses under oath, and hiring outside experts,” Perez said. 

Insurance companies’ profits are regulated and limited to about 4.5%, which is not enticing to investors, especially with the risk of hurricanes any given year. But as the Times reported, insurance executives in Florida have used financial workarounds to reward not only themselves, but also investors. Profits and executive compensation of the insurance company may be capped, but the profits of affiliate and parent companies are not.

DeSantis never touched on the 2022 report during his address to the House and Senate. Instead, he lauded various property insurance reforms by previous legislatures, including the elimination of one-way attorney fees related to assignment of benefits and ending the incentive for attorneys to mislead claimants. Legislation also prohibited roofers from paying or absorbing insurance deductibles. 

Another bill tightened eligibility for those insured through Citizens Property Insurance Corp. by steering potential and existing policyholders to private carriers if a comparable policy was available.

“The fact is that the Legislature has devoted more time and effort to address insurance reforms over the past few years than at any other time in the history of Florida,” DeSantis said. 

Senate President Ben Albritton, a Republican from Wauchula, stated in his address that the Senate will hold insurance companies accountable for rates they charge and services they provide when disaster strikes. 

“They aren’t going to manipulate the system. And, neither is any other industry,” he said.

Last month, state insurance regulators approved rate increases averaging 6.6% for Citizens policyholders who have the more common multi-peril coverage. Details weren’t provided in the order on specifically how much more policyholders in the Keys would pay. They can expect an increase, however, as the new rates take effect June 1. 

Last June, Citizens’ board of directors approved asking OIR for a 13.5% increase for all policyholders. As prescribed by law, Citizens must charge actuarially sound rates which aren’t competitive with the private market. The insurer must also comply with a glide path that only allows annual rate increases of 1%; in 2025, that cap was 14%. 

Bills filed by state Sen. Ana Maria Rodriguez and Rep. Jim Mooney would provide for rate increases not exceeding 10% in areas like the Florida Keys where there isn’t a reasonable degree of competition among property insurers. According to Fair Insurance Rates for Monroe (FIRM), 95% of Monroe County’s wind policies are insured by Citizens. Monroe has 15,000 wind-only policies with Citizens, second only to Miami-Dade. FIRM has long advocated legislators to get Monroe County to the 10% glide path.

“Monroe’s strict building codes and past loss history support this,” says FIRM.