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Yahoo
03-04-2025
- Automotive
- Yahoo
No-fault auto repeal speeding through the House but may stall in Senate
Traffic on Interstate 95 (Photo via the Florida Department of Transportation) Nearing the midway point of the 60-day legislative session, the Florida House continues to advance legislation (HB 1181) to repeal the state's no-fault automobile insurance laws and replace them with a fault-based system. It's one of several pieces of legislation in the House this session that would allow for more litigation — something Insurance and Banking Committee member Rep. Mike Caruso noted Thursday while arguing against HB 1181. He was one of two 'no' votes on the bill, which now heads to the House Judiciary Committee, its last stop before a full House vote. 'This feels good for the trial attorneys, and maybe we should call this the 'Insurance and Trial Attorneys Subcommittee' because I feel like we're doing a lot just for the benefit of trial attorneys. And by doing that, I think we're doing wrong for Floridians,' said Caruso, whose hawkish position on immigration has already put him at odds with House Speaker Daniel Perez, an attorney. The Senate companion (SB 1256) has been referred to three committees: Banking and Insurance; Agriculture, Environment, and General Government Appropriations; and Rules. The bill hasn't been heard by any of them. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Florida drivers now are required to carry $10,000 in PIP (for personal injury protection) coverage plus $10,000 in property damage liability insurance. Those are minimum requirements, and drivers can purchase additional coverage. According to the Department of Highway Safety and Motor Vehicles, just under 6% of drivers on Florida roads were uninsured as of February. The chiropractors want you to protect them. They just told you that. God bless them. I love chiropractors. The hospitals want you to protect them. The doctors want you to protect them. And funny, the insurance companies want you to protect them, too. But I ain't here to protect any of them, and neither are you. We're here to make sure that it's a fair and equitable moment in Florida when you put your key in your car and drive and somebody hurts you. – Rep. Danny Alvarez HB 1181 would eliminate the state's no-fault law and drop the PIP mandate. Additionally, the bill would increase the minimum bodily injury liability coverage limits from $10,000 per person and $20,000 per incident to $25,000 per person and $50,000 per incident. Representatives of the insurance industry, health care sector, and business interests testified against the bill, arguing the new insurance would cost more and could cause lower-income drivers to drop their coverage and increase the number of uninsured motorists on the road. Mark Delegal represents State Farm, the largest auto insurer in the state, as well as the Safety Net Hospital Alliance of Florida, which represents some of the largest public hospitals and teaching institutions. He testified that legislation passed in 2023 eliminating one-way attorney fees in coverage disputes and cracking down on bad faith lawsuits are beginning to take hold in the auto insurance market. Rates, he testified, are coming down as those changes take effect. Also representing the hospitals, Delegal said scrapping the no-fault means drivers will go to court to prove who's to blame for auto accidents and that takes time. 'Hospitals are going to see delayed payment and this is not good,' he said. It was a theme echoed by Toni Large, who represents emergency room physicians and orthopaedic surgeons. Large said that ER physicians bill the care they provide on a level of one through five, with the latter being trauma patients. Most care stemming from automobile accidents provided by her clients is a level three. While the PIP reimbursement for her physicians providing level 3 care is $1,500 she said, the payments come quickly. 'It really impacts physicians when they are waiting two years for payments,' she said. Motorcyclists from across the state for the second time in two weeks trekked to Tallahassee to show support for PIP repeal because they are not eligible for the coverage. The Florida Justice Association, which represents trial attorneys, also spoke out in support of repeal, citing the high costs for paltry coverage. Vero Beach attorney and FJA member Dane Ullian argued that PIP, initially passed 50 years ago and meant to provide health care for drivers involved in car accidents, is redundant now that an estimated 90% of residents have some form of health insurance. Eliminating the mandate to buy the coverage means they won't be paying double the costs of health insurance, he said. 'One of the reasons [auto] rates are so high is we have a vestigial tail of an antiquated insurance system from 50 years ago, the redundant PIP no-fault system which requires every single driver in the state of Florida to buy a state-regulated health insurance plan for $10,000 of coverage when almost 90% of Floridians already have health insurance,' Ullian said. 'So, right now we're forcing 90% of Florida drivers to buy a health plan they don't want to fund coverage for the other 10% of Florida drivers to get a layer of coverage that they don't need,' he said. Bill sponsor Rep. Danny Alvarez said HB 1181 is about improving protections for Florida drivers and not about any particular industry. He noted that PIP laws have been changed at least five times since initially being passed — each time with the promise that the changes will reduce costs and ferret out fraud in the system. Savings have not come, he said, and the system does not make the driver whole. 'The chiropractors want you to protect them. They just told you that. God bless them. I love chiropractors. The hospitals want you to protect them. The doctors want you to protect them. And, funny, the insurance companies want you to protect them, too,' Alvarez said. 'But I ain't here to protect any of them, and neither are you. We're here to make sure that it's a fair and equitable moment in Florida when you put your key in your car and drive and somebody hurts you,' he added. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
15-03-2025
- Business
- Yahoo
Florida lawmakers scrutinize insurers over hidden profits, rising rates
The Brief Florida lawmakers are investigating whether insurers funneled money to affiliates while claiming financial losses. A 2022 report found insurers reported losses, but related firms saw significant profits. Officials say the report was never finalized, raising questions about transparency and rate hikes. TALLAHASSEE, Fla. - Florida House members on Friday began digging into questions about property-insurance companies sending money to affiliated firms and shareholders while arguing the industry was losing money. What we know Florida lawmakers are questioning whether property-insurance companies have funneled money to affiliates and shareholders while claiming financial struggles. A 2022 report examined 53 insurers and found that, while insurers reported a net loss of $432 million from 2017 to 2019, affiliated firms saw net income of $1.8 billion. Lawmakers were not given the report when passing insurance reforms in 2022. What we don't know The status of the report remains unclear—regulators say it was only a draft, and a final version was never completed. It is uncertain whether insurers misrepresented their financial situation to justify rate hikes and legal protections. Officials have not provided a clear answer on why the report was not pursued further. The backstory Florida's property insurance market has faced turmoil, with companies pulling out, raising rates, or going insolvent. In a 2022 special session, lawmakers passed major changes to protect insurers from lawsuits. A recent Tampa Bay Times/Miami Herald report brought attention to the existence of the 2022 study, prompting renewed scrutiny. Big picture view Florida's insurance market is one of the most challenging in the country, with insurers struggling to stay afloat due to hurricane risks and litigation costs. Regulators argue that allowing companies to use managing general agents (MGAs) has helped attract investment to the market. Critics, however, believe the system has created financial loopholes that drive up consumer costs. What they're saying "Our purpose today is to find out if insurance companies have been allegedly ripping us off, ripping the citizens of Florida off, why rates are so high," said Rep. Mike Caruso, R-Delray Beach. "If you are a commissioner of insurance, and you don't have a concern about perverse incentives that can exist in holding-company arrangements, MGAs and affiliate transactions, then you shouldn't have the job," Insurance Commissioner Michael Yaworsky. "Now we believe there's a potential that those cries were not real, that their profits were higher than expected and potentially there was some sort of shell game being played," said House Speaker Daniel Perez, R-Miami. STAY CONNECTED WITH FOX 35 ORLANDO: Download the FOX Local app for breaking news alerts, the latest news headlines Download the FOX 35 Storm Team Weather app for weather alerts & radar Sign up for FOX 35's daily newsletter for the latest morning headlines FOX Local:Stream FOX 35 newscasts, FOX 35 News+, Central Florida Eats on your smart TV The Source This story was written based on information shared by The News Service of Florida.
Yahoo
14-03-2025
- Business
- Yahoo
Lawmakers grill Florida regulators about study on insurance ‘accounting tricks'
TALLAHASSEE — State regulators told lawmakers on Friday that a state report showing insurers losing money while their affiliates made billions 'raised red flags' but was incomplete because it was never finished. During a three-hour hearing, Florida's current and former insurance commissioners were grilled by Republicans and Democrats about why the report was left undone in 2022 and never given to the Legislature. 'I find as a legislator that that's outrageous, that we're getting something so antiquated and so full of flaws,' said Rep. Mike Caruso, R-Delray Beach. The Times/Herald last month revealed the never-before-seen state report, which found that insurance companies funneled billions of dollars to affiliate companies while claiming to lose money between 2017 and 2019, when the state's insurance crisis began. In response, House Speaker Daniel Perez, R-Miami, ordered a House committee to investigate whether insurers were using 'accounting tricks' to hide profits. The first-of-its-kind study was commissioned by former Insurance Commissioner David Altmaier in 2021, after hearing concerns about insurers' use of affiliate companies. Insurers create affiliates that charge the insurance company for basic services, such as handling claims and writing policies, at sometimes inflated rates — allowing them to extract profits beyond what state regulators would normally allow. The state paid a consultant $150,000 to analyze the relationships. The consultant gave the report to the state on April 1, 2022, according to emails. The results 'certainly raised some red flags,' Altmaier told lawmakers. 'I think what we said was, There's a lot of smoke here, and we need to make sure we go and see if there's a fire burning or not,' Altmaier said. 'That was the effort I thought was underway when I left the office.' He left the office in December 2022. But the office never investigated further. Instead, the report was left in a 'draft' form and never followed up. Lawmakers repeatedly asked how that could happen. 'Why did the investigation stop?' said Rep. Susan Valdés, R-Tampa. 'Who made that decision to say, 'This isn't important enough'?' 'I would say nobody made that decision,' Altmaier said. 'Candidly, when I was asked to come and speak here today, that's the one question that I haven't been able to come up with an answer to.' Altmaier, who began consulting for insurers three months after leaving office, said he didn't recall telling his successor, Office of Insurance Regulation Commissioner Mike Yaworsky, about it. 'Hindsight being 2020, if I could go back and do it all over again, maybe I would call him and said, 'Don't forget to finish that report,'' Altmaier said. Yaworsky said it could have been dropped because regulators were understaffed and dealing with the height of the insurance crisis that year. Lawmakers met twice in emergency legislative sessions in 2022, after the report was produced, to pass reforms making it harder to sue insurance companies. Some lawmakers at the time questioned the role of affiliate companies in the insurance crisis. The Times/Herald first requested the report under the state's public records law in November 2022. Yaworsky said he wasn't aware of the report until October 2024. That's when a lawyer for the Times/Herald demanded the state turn it over. The office told the Times/Herald's lawyer that it did not exist, before providing the report's seven-page executive summary in December last year. Multiple lawmakers asked Yaworsky about why it took the office more than two years to turn over the records. He said he didn't know, but that he took 'ownership' for the shortfall and that the office has since streamlined its responses to records requests. Yaworsky and Altmaier said the report was never given to lawmakers because it wasn't complete. The report was produced by a consultant for $150,000. The author determined that the insurers in the study, minus a couple of national outliers, showed a net loss of $432 million, while their affiliate companies showed a net income of $1.8 billion. The insurers also spent $680 million on dividends to shareholders during the period. The result left some insurers financially weaker and potentially unable to pay claims, but able to justify bigger rate increases. The author of the report concluded most of the arrangements between Florida-based insurance companies and their affiliates were not 'fair and reasonable' under her understanding of state regulations. Yaworsky said the report 'was a good initiative by the office' to better understand the industry, but he disagreed with the author's methodology. 'It doesn't mean the conclusions are wrong or incorrect,' he said. It was also flawed, Yaworsky said, because 23% of insurance companies either did not respond to the office's request for information or provided limited data. The state hasn't renewed the analysis since, but Yaworsky said he would 'happily' do it each year if legislators wanted it. 'I think we're all screaming for it,' Caruso responded. The House Insurance and Banking Subcommittee will continue to hold hearings, including potentially hearing from insurance company executives, said chairperson Brad Yeager, R-New Port Richey. 'I won't be satisfied until we get to the actual truth and get answers on this,' Yeager said. Insurance companies' improper use of affiliates, some of which are referred to as 'managing general agents,' have been cited in numerous company insolvencies in the past. In 2013, the Office of Insurance Regulation fined Universal Property & Casualty Insurance Co. $1.3 million in part because one of its affiliates made $44 million in profit while Universal lost money. 'If you are a commissioner of insurance, and you don't have a concern about perverse incentives that can exist in holding company arrangements, MGAs (managing general agents) and affiliated transactions, then you shouldn't have the job,' Yaworsky said. 'It is constantly on my mind.' Since 2022, the office has pushed for more oversight of those affiliate companies, but lawmakers haven't granted some of the tools the office has requested. Yaworsky is again asking to define 'fair and reasonable' services in state statute, which would allow him to hold companies accountable. But Yaworsky said none of the insolvencies in recent years have been due to affiliate relationships. He and Altmaier said excessive litigation, storms and rising costs were why companies went out of business. Ultimately, Florida's one of the most volatile insurance markets, Yaworsky said, and agreements with affiliates is the business model companies have found to attract investors. 'How many of you would like to invest that $100 million into a Florida domestic property that you may never get back?' he asked. Rep. Karen Gonzalez Pittman, R-Tampa, raised her hand. 'After reading the report about the MGAs (managing general agents), I'd want to invest.'
Yahoo
11-02-2025
- Business
- Yahoo
Florida's condo fee crisis could trigger the 'next wave of homeless people' in the state, says one representative
A new building safety law that was passed in the wake of the Surfside tragedy in Florida has resulted in a tremendous amount of financial pressure on condo owners. Now, one state lawmaker warns it could prompt the "next wave of homeless people," with elderly residents living on fixed incomes at the forefront. The law requires associations for condos three stories or higher to fully fund their maintenance reserves. Previously, they could waive filling these reserves, which potentially allowed damage to build up over decades. It's also mandatory for buildings at least 30 years old to undergo structural assessments and address any critical issues. Many owners have blamed these rules for adding upwards of tens of thousands of dollars in new fees. Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead One dozen eggs in America now costs $4.15 — and $14.35 for a pound of sirloin steak. Both record highs. 3 simple ways to protect your wealth in 2025 Home prices in America could fly through the roof in 2025 — here's the big reason why and how to take full advantage (with as little as $10) Rep. Mike Caruso rang the alarm after the issue was dropped from a special session in January. "It's sad, and we're not going to address it here in the Florida House," Caruso told the Miami Herald. "I'm shocked by it." Here's what has Caruso concerned about elderly condo owners. Following the 2021 collapse of the Champlain Towers South, a 12-story condominium in the Miami suburb of Surfside, in which 98 people died, legislators rushed to pass safety reforms. A new bill was signed into law that includes the above requirements. But there was a problem. Many condo associations were short on reserves. So, the cost to fill them, pay for required inspections and fund any potential repairs, in a number of cases, was passed on to unit owners. Caruso said that many condo owners, especially those who are elderly and on a fixed income, are at risk of losing their homes due to the legislation because they can "no longer afford the tripled reserves or the quadrupled dues." Many residents of these condos have lived there for a long time, he says, and they need help now. Some lawmakers argue, however, the situation is too complicated to be effectively solved over the course of a brief special session and more time is needed. Read more: 82% of Americans are missing out on a savings account that pays over 10 times the national average New condo fees can be a big problem by themselves, but the situation is made worse by other high living costs. Home insurance prices in Florida, for example, are among the highest in the nation. The average annual premium for a $300,000 dwelling in the state was $5,488 as of Feb. 10, nearly two-and-a-half times the national average of $2,258, according to Bankrate. Those entering the market or want to make a move may also struggle. Mortgage rates nationwide are floating near the 7% mark, while the median sales price of a house in the U.S. remained elevated at $419,200 as of the fourth quarter of 2024. Some Florida retirees have also reported going back to work because they can no longer pay the bills. It's uncertain how soon condo owners in the state might get any relief, however, it isn't an issue that's going away. Florida Gov. Ron DeSantis himself has called on the legislature to amend the law. "We're now seeing some problems that I think were unintended that have popped up, and we have a responsibility to act to make sure that people can stay in their condo units," DeSantis said, according to Florida Politics. Self-made $500M mogul Ben Mallah reveals his 'essential' US portfolio that he says Amazon 'can't hurt' — here's his secret formula and how you can copy it in 2025 I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Jamie Dimon issues a warning about the US stock market — says prices are 'kind of inflated.' Crashproof your portfolio with these 3 rock-solid strategies This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
