Latest news with #DougQuinn
Yahoo
27-03-2025
- Business
- Yahoo
Report uncovers absurd tactics used by home insurers in disaster-hit state: 'The people ... need answers'
With the rising risk of extreme weather events in Florida, home insurance rates have gone through the roof. Meanwhile, the insurance market is suffering a meltdown and claiming huge losses of profit. However, a 2022 report shared by the Tampa Bay Times and Miami Herald showed that while Florida insurance companies were complaining about profit losses, in reality, their parent companies and affiliates were making billions. The report found that at the beginning of the homeowner's insurance crisis in Florida, between 2017 and 2019, insurance companies said they lost $432 million in profits. The companies used this profit loss to justify raising their rates astronomically. While Florida insurance companies claimed considerable losses in profit, they were moving money from their coffers to their affiliate companies and shareholders, who were making bank. Affiliate companies reported a total of $1.8 billion in net income, while insurers paid their shareholders around $680 million in dividends. The author of the report concluded some insurers in Florida took so much money from their own companies that they defied state regulations. The result was insurers who were financially weak and sometimes unable to pay out on homeowner claims. Tampa Bay Times shared comments from Doug Quinn, the executive director of the American Policyholder Association, who said, "These companies are crying poverty in order to raise premiums or justify insolvency: 'It's litigation, it's fraud.' This is money shifting from their left pocket to the right, and crying poverty while their right pocket bulges." Human activity, such as the burning of dirty energy, makes global temperatures rise. Oceans take in approximately 93% of the extra energy caused by this overheating of the planet, according to a Climate Science Special Report. The warming of oceans has not only been linked to more intense hurricanes but has resulted in sea levels rising. Rising sea levels create storm surges, leading to increased flooding further inland in coastal areas. Do you think America is in a housing crisis? Definitely Not sure No way Only in some cities Click your choice to see results and speak your mind. Add to that the growing population living in coastal areas in the United States, and you have a recipe for disaster. Hurricanes and flooding can wreck homes, vehicles, and more, which makes homeowners insurance all the more vital. However, with insurance companies unable to pay claims or outright dropping coverage in high-risk coastal areas (all while they claim profit loss while making billions), coastal communities are more at risk than ever. According to the Tampa Bay Times, Democratic lawmakers in Florida are calling for Governor Ron DeSantis to gather a statewide grand jury to investigate this matter. They are also asking House Speaker Daniel Perez to put together a committee to determine why lawmakers never received this report and look further into the issue. As House Minority Leader Fentrice Driskell said in a statement shared by the Times, "This is outrageous, and the people of Florida need answers." Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Associated Press
19-03-2025
- Business
- Associated Press
Lufkin Industries Announces Sale of North America Downhole business to Q2 Artificial Lift Services
HOUSTON, March 19, 2025 (GLOBE NEWSWIRE) -- Lufkin Industries ('Lufkin'), a global leader in surface production equipment and automation solutions, has announced the sale of its North America Downhole ('NAM Downhole') business to Q2 Artificial Lift Services ('Q2'), a leading provider of downhole reciprocating pumps. This transaction aligns with Lufkin's strategic focus on its core surface business and Q2's focus on subsurface business, positioning both companies for long-term growth and profitability. Terms of the transaction were not disclosed. 'This transition allows us to focus on Lufkin's core strengths of Software, Automation, Surface Equipment and comprehensive service to our domestic and international customers, areas where Lufkin has for over 120 years been an industry leader,' said Brent Baumann, CEO Lufkin Industries. 'By transitioning our NAM Downhole business to Q2, we are ensuring that our customers continue to receive world-class support while allowing Lufkin to invest further in innovation and growth within our core areas. We are confident that Q2 will be an excellent steward of the NAM Downhole business and great partner to the customers and employees transitioning as part of this sale.' Under the terms of the agreement, both downhole pump and rods assets team members and related customer relationships within North America will transition to Q2, ensuring continuity of service and support. Q2 Artificial Lift Services, known for its commitment to excellence in the sale, service, engineering and manufacturing of downhole reciprocating pumps, will integrate the NAM Downhole business into its portfolio, further strengthening its capabilities and expanding its reach into rods. Doug Quinn, CEO/President of Q2 ALS, said 'We are extremely excited about this particular acquisition as it immediately strengthens our artificial lift products and services and expands our employee roster with highly skilled technical depth. Additionally, with respect to US Rod, this part of the deal further expands our ability to provide a complete downhole system for our customer base. We have built a very dominant presence in the market, and this acquisition further demonstrates our continued commitment to the downhole artificial lift community across all of North America.' Both companies are working closely to ensure a seamless transition for all customers, employees and business partners. The sale reinforces Lufkin's commitment to its flagship surface production and automation business while enhancing Q2's position in the downhole market to include rods as well as expanding its downhole pump capabilities. For more information about Lufkin Industries please visit For more information on Q2 Artificial Lift Services please visit About Lufkin Industries Lufkin Industries is a leading provider of surface production equipment, automation solutions, and oilfield services, helping operators optimize efficiency and maximize production. With a legacy of engineering excellence and innovation, Lufkin has been at the forefront of the energy industry for over 120 years, delivering high-quality Beam Pumping Units, advanced automation technologies, and global service solutions. By focusing on its core strengths, Lufkin continues to drive innovation and support the evolving needs of the oil and gas sector. For more information, visit locations strategically located across Western Canada and the United States. For more information, visit
Yahoo
19-03-2025
- Business
- Yahoo
Study uncovers 'smoking gun' evidence of insurance execs' shocking behavior after catastrophe: 'It's fraud'
Evidence has surfaced that Florida insurance companies claimed monetary losses while redirecting billions of dollars to investors and affiliates. A study revealed that Florida-based insurers' executives took exorbitant amounts of money from their companies following Hurricanes Irma and Michael. As the Tampa Bay Times reported, the 2022 study has only recently been released after a two-year public record wait. The study explained how, during Florida's insurance market's post-hurricane crisis, company leaders distributed $680 million to shareholders and diverted billions of dollars to affiliate companies. With this money diverted and insufficient funds to pay insurance claims, Florida fell even deeper into an insurance meltdown. Doug Quinn, executive director of the watchdog American Policyholder Association, referred to the findings as a "smoking gun." "These companies are crying poverty in order to raise premiums or justify insolvency: 'It's litigation, it's fraud,'" Quinn said. "This is money shifting from their left pocket to the right, and crying poverty while their right pocket bulges." This news from Florida is concerning because it affects homeowners insurance coverage and costs during extreme weather events. Human activities like burning dirty fuel for energy create more planet-overheating pollution and extreme weather events, which put coastal communities at heightened risks. These worsening weather trends are prompting insurance companies to drop their coverage, leaving homeowners scrambling to rebuild their lives with few resources or options. It's disturbing to think about the wealthy few profiting from insurance companies while citizens' lives are devastated by intense storms. Unfortunately, Florida isn't the only place where homeowners insurance is a major issue. Do you think your city has good air quality? Definitely Somewhat Depends on the time of year Not at all Click your choice to see results and speak your mind. Insurance companies have tried to cancel coverage for people in high-risk wildfire areas in California and other states. Even families that can get coverage face extremely high premiums and are worried about paying for repairs after storm damage. To address the insurance issue in Florida, regulators asked lawmakers to establish clearly defined definitions of fair and reasonable dividends. After discovering unjustifiable fees and payments, regulators modified and canceled some companies' agreements. As an individual, something you can do to protect yourself from increasingly strong storms is to routinely inspect your home for damage and address potential issues before they become major claims. You can replace outdated building materials with upgraded materials like a fire-resistant roof and impact-resistant windows. Regularly review your claims history and coverage levels, shopping around for the best rates and comparing quotes from insurance providers in your area. Another idea is to contact your pro-climate representatives to advocate for homeowner insurance market reforms and disaster mitigation programs where you live. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Miami Herald
24-02-2025
- Business
- Miami Herald
With ‘smoking gun' report, it's time for Florida property insurance reform
For years, Floridians have darkly suspected they are getting fleeced — that's a kind word for it — by property insurance companies as rates skyrocketed and coverage of our homes shrank. Now, a previously unpublished 2022 report, obtained by the Miami Herald/Tampa Bay Times, indicates that insurer parent companies were steering billions of dollars to affiliate companies, all while claiming losses. If this report proves true, and it certainly seems to be, homeowners were the unwitting dupes of a system in which insurance companies were able to siphon off money but keep charging more to homeowners. The story about the report, published Saturday, should be required reading for every Florida homeowner. It details how insurers were able to move money via fees to 'affiliate' companies — owned by the insurers — and to shareholders. And yet, how many times have we all heard insurers claim poverty, saying that lawsuits, fraud and the state's exposure to hurricanes justified jacking up rates once again? You can almost hear our collective blood pressure rising across the state. Doug Quinn, executive director of the watchdog American Policyholder Association, called the report a 'smoking gun.' Companies, he said, were shifting money 'from their left pocket to their right' and using poverty as an excuse to raise rates or declare insolvency. Birny Birnbaum, executive director of the Center for Economic Justice and a former chief economist at the Texas Department of Insurance, called the numbers in the report — the amount of money insurers sometimes paid to affiliate companies — 'eye-popping.' And the author of the report itself offered the opinion that, of the 30 Florida-based companies that provided data, 19 were paying fees to their affiliate companies that were 'not fair and reasonable.' The affiliate system has long been recognized as a problem, but in 2021, Florida regulators actually got the power to demand more information from insurers and affiliates — and hold them accountable. They found that between 2017 and 2019, insurers in the study had a net loss of $432 million. The affiliates though? They had a net income of $1.8 billion. When all 53 companies in the state were included, net income was $61 million with affiliates making about $14 billion, the story said. (Those numbers likely included national companies that provide auto insurance.) One thing to note, as the Herald/Times story reported: Profits of insurance companies are limited by regulators to about 4.5%. There is no such cap on the profits for affiliates and parent companies. Lawmakers seem not to have known about the study until recently. The Office of Insurance Regulation didn't share the 2022 report with legislators, telling the Herald/Times: 'Our office does not release every internal analysis of companies to the Legislature,' the office said. The study was never been made public and the executive summary — only — was released to the news organizations after an incredible two-year wait for public records. Florida has been in an insurance crisis for years, and state lawmakers have made some efforts to address it. Recently, Gov. Ron DeSantis announced that premiums for Citizens Property Insurance, the 'insurer of last resort,' will actually go down in Miami-Dade County this year by an average of 6.3%. We'll take it, of course, but that's not enough to make much difference for most people. Florida has topped the nation in premium costs for too long. We want to see the Legislature and governor tackle the insurance problem with the same kind of energy they brought to the topic of illegal immigration. This year, Florida insurance regulators are asking lawmakers to define 'fair and reasonable' for the fees paid to affiliates and include the financial health of the insurer and how much in dividends the company paid out. This is the second try for this kind of legislation; an effort in 2023 failed, apparently because it would have upset the industry's business model. Another reform under consideration would require affiliates be paid in dollar amounts, not percentages of premiums — which means affiliates get paid more when premiums go up. We've talked about the need for insurance reforms for years. With this report, though, lawmakers have the information to act. You can bet homeowners will be watching intently. Click here to send the letter.
Miami Herald
22-02-2025
- Business
- Miami Herald
Secret study found Florida insurers sent billions to affiliates while crying poor
While Florida insurers claimed to be losing money in the wake of hurricanes Irma and Michael, their parent companies and affiliates were making billions of dollars, according to a study obtained by the Herald/Times. The start of the state's insurance market meltdown came on the heels of those two storms between 2017 and 2019, as companies justified big rate increases to cover their losses. But those financial hardships don't tell the full story, according to the 2022 study that has never been made public and was released to the Herald/Times after a two-year wait for public records. The report, the most in-depth dive into the byzantine finances of Florida's homeowners insurance market, reveals that as the insurance market was ailing and companies were losing money, executives distributed $680 million in dividends to shareholders while diverting billions more to affiliate companies. Executives with most Florida-based insurers were removing so much money from their companies that they violated state regulations, the study's author concluded. The result left some insurers financially weaker — and potentially unable to pay claims — heading into the depths of the state's insurance crisis. State lawmakers never saw the report. The state's then-insurance commissioner and Gov. Ron DeSantis focused on legal reforms making it harder to sue insurers. And regulators have not repeated the study since, despite a recommendation from the report's author. The findings are a 'smoking gun' that confirms what has long been suspected in Florida's market, said Doug Quinn, executive director of the watchdog American Policyholder Association. 'These companies are crying poverty in order to raise premiums or justify insolvency: 'It's litigation, it's fraud,'' Quinn said. 'This is money shifting from their left pocket to the right, and crying poverty while their right pocket bulges.' State regulators say the insurance market is different today. In recent years, Florida Insurance Commissioner Mike Yaworsky has pushed for more oversight of affiliate companies. This year, he's asking lawmakers to change how insurers pay affiliates. While the report is an incomplete picture of insurers' money, Florida's Office of Insurance Regulation said in a statement, the study affirms that the reforms the office wants are warranted. But Paul Handerhan, founder of the trade group Federal Association for Insurance Reform, whose members include insurance companies, disputed the idea that executives were deliberately moving money around. 'This notion that they're fleecing their policyholders and offshoring the money to their affiliates is just not happening,' Handerhan said. 'None of these guys did this as a strategy.' Two-year wait During debates in the Legislature over how best to respond to the insurance crisis between 2018 and 2023, some lawmakers asked what role affiliate companies played. Rep. Hillary Cassel, R-Dania Beach, said lawmakers and observers had a lack of data about affiliates, known in the industry as 'managing general agents,' when they were voting on legislation. 'All of us informed on the issues knew [managing general agents] were a problem,' said Cassel, a former lawyer for insurance companies who now sues them. The Office of Insurance Regulation said in a statement that 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. 'Our office does not release every internal analysis of companies to the Legislature,' the office said. The Herald/Times requested the report in November 2022, but the office did not turn over the executive summary until December 2024. The affiliate structure is nothing new in Florida. Profits of insurance companies are limited by regulators to about 4.5 percent — hardly enticing to investors, considering the risk of hurricanes. However, insurance executives in Florida have used financial workarounds to reward investors and themselves. While the profits and executive compensation of the insurance company are capped, the profits of affiliate and parent companies are not. So executives create sister companies that charge the insurance company for basic services, such as claims handling, underwriting, accounting and issuing policies. (Large national insurers typically handle all of those services internally.) Arrangements between insurance companies and affiliates must be approved by the state, and regulations say they must be 'fair and reasonable,' which isn't defined in state law. Company structures can appear like a spiderweb of entities. When FedNat Insurance went insolvent in 2022, it was one of nine corporations under a parent company. When Southern Fidelity Insurance dissolved that year, it was one of six companies under the same umbrella, and its holdings included a hunting lodge maintained at a cost of $485,000 per year. State officials were investigating whether the company 'took active measures to conceal these costs' from regulators, according to an October insolvency report. Most insurers in Florida have similar arrangements, which are enormously lucrative for some executives who were the highest-paid in the nation in some years. But this type of setup can be easily abused and requires greater regulatory scrutiny, according to the National Association of Insurance Commissioners. That's because the owner of the insurance company also owns the affiliates, creating an incentive for executives to overcharge the insurance company for services. A deeper look Such abuses have been repeatedly found by state officials as the reason why companies go insolvent. In one 2009 insolvency, auditors wrote that executives were 'stripping the company of cash' as it was going out of business. The ratings agency AM Best last year found that affiliate relationships were the third-leading cause of insolvencies nationwide between 2000 and 2022, after catastrophe losses and fraud, Insurance Journal reported. Still, it's unlikely Florida regulators knew the full scope of insurance money-shifting arrangements until 2021, when lawmakers gave them the ability to demand more information from insurers and affiliates. Using that power, the state's then-commissioner, David Altmaier, paid a Connecticut-based consultant nearly $150,000 to parse through the information the companies provided. Several companies turned over incomplete data, according to the study. Between 2017 and 2019, the insurers in the study (minus a couple of outliers) showed a net loss of $432 million. Their affiliate companies showed a net income of $1.8 billion. With all 53 companies included, the industry recorded $61 million in net income, and affiliates made about $14 billion in net income, according to the study. Those figures likely include national carriers that also provide auto insurance. The author noted that the affiliates of Florida-based companies were profitable even after they injected $485 million back into the insurers and waived $208 million in fees during the three years, steps made to help keep the insurers afloat. In the author's opinion, 19 of the 30 Florida-based companies that provided data were paying fees to their affiliate companies that were 'not fair and reasonable.' The numbers in the study are 'eye-popping' and raise questions about why regulators would allow such financial arrangements, said Birny Birnbaum, executive director of the Center for Economic Justice and a former chief economist at the Texas Department of Insurance. 'It's unclear why [the Office of Insurance Regulation] isn't doing anything about it,' Birnbaum said. Regulators this year are asking lawmakers to define 'fair and reasonable' to include the actual cost of the service provided, the overall health of the insurer and how much in dividends were paid out. Regulators asked for that in 2023 but lawmakers rejected it, claiming it would 'upset the apple cart' of Florida's insurance industry. The office's proposed legislation would also require fees to affiliates be paid in dollar amounts, instead of percentages. Affiliates will typically charge the insurance company fees of between 20% and 34% of premiums, which results in more money for the affiliates when premiums go up. The office has canceled or modified some companies' agreements. In 2023, for example, one company's contract with an affiliate was canceled after regulators discovered that the affiliate was charging the insurer additional fees on top of the cost of the services being provided, according to the office.
