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After study on insurer profits, Florida regulators didn't follow up, author says

After study on insurer profits, Florida regulators didn't follow up, author says

Miami Herald03-04-2025

Last month, Florida's current and former insurance regulators said the state never finished a 2022 study showing insurers losing millions of dollars while their affiliates were making billions.
On Thursday, the author of that study said she believed it was completed and that regulators never told her it wasn't.
'In our mind, we had our final draft,' said Jan Moenck, an analyst with the Connecticut-based company hired by regulators to produce the report.
To some lawmakers, the testimony appeared to contradict testimony by Office of Insurance Regulation Commissioner Mike Yaworsky and past Commissioner David Altmaier.
'What is being revealed basically said they lied to us,' said Rep. Dianne Hart, D-Tampa.
Yaworsky strongly denied that he misled lawmakers.
'The idea that I lied somehow around that is just flatly false,' he said after the hearing.
Last month, House Speaker Daniel Perez, R-Miami, ordered hearings by a House committee after the Herald/Times revealed that the state had commissioned a study examining insurers' use of affiliate companies.
Florida-based insurance companies have long used affiliate companies, which charge the insurance company for services, such as handling claims or writing policies, sometimes at inflated prices.
The state's study, capturing data between 2017 and 2019, was the deepest dive into the business practice. Moenck found that Florida-based insurers had a net loss of $432 million, while their affiliates had a net income of $1.8 billion.
The industry overall spent $680 million on dividends to shareholders during the period.
The report was produced in April 2022, at the height of the insurance crisis, but never given to lawmakers. Instead, lawmakers focused on making it harder to sue insurance companies.
Altmaier, who commissioned the report, told lawmakers last month that the initial report 'certainly raised some red flags,' and his office intended to follow up.
Yaworsky said he didn't learn of the report until October 2024, when the Herald/Times' lawyers demanded his office turn it over. The newspapers first requested it in 2022, before Altmaier left the office.
Yaworsky said the report was incomplete because 23% of insurance companies never responded to the office's request for data and because it didn't provide the level of detail of insurers' finances that the state needed.
Moenck agreed that it is up to the client to decide when a report is finished. She said more information on finances would be helpful but difficult to obtain.
'I don't know that a person would ever be able to capture that unless you had a forensic accountant looking at each company on an individual basis,' Moenck said.
After turning over her report in 2022, she said she asked whether regulators wanted a verbal presentation about her findings or had any other questions.
'We did not receive any requests for additional work or follow-up on the reports,' Moenck said.
Committee chairperson Brad Yeager, R-New Port Richey, said the fact that regulators didn't follow up was 'telling.'
At least one more hearing, to find forensic accountants who can investigate further, will be scheduled, Yeager said.
'We've asked questions and we've gotten good answers, but I think those good answers have provided more questions and some concern,' he said.
Earlier Thursday, his committee advanced a bill that would require insurance companies to turn over more details about their relationships with affiliate companies.
'The report, I think, made everybody step back,' said the bill sponsor, Rep. Griff Griffitts, R-Panama City Beach, referring to the 2022 report brought to light by the Herald/Times.
Yaworsky said he welcomed getting more details about insurance companies' practices. He has asked for more oversight of insurers' affiliate companies.
'For years now, we have called for more scrutiny in this space,' Yaworsky said. 'We've gotten some, but at other times, the Legislature has said 'No thank you.''

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