Latest news with #WeissRatings
Yahoo
03-06-2025
- Business
- Yahoo
FCC and Bank Regulators Ignoring Big Risks at 649 U.S. Banks
PALM BEACH GARDENS, Fla., June 3, 2025 /PRNewswire/ -- Weiss Ratings, the nation's only independent bank safety rating agency, has released data today to challenge a decision by the FCC that radically loosens its screening standards for banks deemed qualified to provide letters of credit for its programs. (See Weiss' May 30 letter to the FCC here.) Previously, the FCC accepted only banks with a Weiss rating of B- (good) or better, which would include 1,639 strong institutions. Now, however, under pressure from some of the nation's banking associations, it has decided to accept any bank deemed "well capitalized" by federal banking regulators. This includes 649 banks that currently get a Weiss Rating of D+ (weak) or lower, which represents an unacceptably high probability of future financial difficulties, based on over 20 years of historical data on bank failures. Weiss Ratings founder, Dr. Martin D. Weiss, commented, "The problem starts with the banking regulators — the Fed, FDIC and OCC. Their bar is so low that they include some of the nation's weakest banks in their 'well capitalized' category." Indeed, according to banking regulators, 99.4% of the nation's 4,484 banks are deemed "well capitalized," while only 0.6%, or a meager 27, are said to be "undercapitalized." This flies in the face of a key measure of bank capital — common equity tier 1 RBC — has been going mostly down since 2019. Some of the riskier banks considered "well capitalized" include Bank of America, the nation's second-largest bank with $2.6 trillion in assets. Not only does it have the weakest Weiss capital ratios among the nation's 50 largest banks, but it also reports $49.7 in unrealized losses on its books for each $100 of Tier 1 capital. This means that, if, at a future date, Bank of America must realize its losses, half its capital could be gone. Other relatively large banks in the same approximate risk category as Bank of America (a Weiss ratings of C-) include Synchrony Bank (with $114.8 billion in assets), Flagstar Bank, National Association ($97.6 billion), East West Bank ($75.7 billion), Valley National Bank ($61.8 billion), Associated Bank, National Association ($43.2 billion), Bank OZK ($39.2 billion), Prosperity Bank ($38.8 billion), Eastern Bank ($25 billion), plus ten others with assets over $10 billion. Meanwhile, USAA Federal Savings, with $110.8 billion in assets, is in even worse shape — with an unhealthy combination of both weak capital and poor profitability. Others in the same general risk category as USAA (with a Weiss Rating of D+ or lower) include Bank of Hawaii ($23.8 billion in assets), Cathay Bank ($23.2 billion), Farmers & Merchants Bank of Long Beach ($11.5 billion) and Washington Trust Bank ($10.7 billion), plus many others. All suffer from severe deficiencies. Yet, all are said to be "financially stable" per the FCC's new standards. Based on these same new standards, most of the large banks that failed or received a bailout during the Great Financial Crisis would have also been deemed "well capitalized" or "financially stable." These include Bank of America, JPMorgan Chase, Wells Fargo, Washington Mutual Bank, Bank of New York Mellon, U.S. Bancorp, Capital One Financial, PNC Financial Services Group, Regions Financial, State Street and BB&T Corp (now Truist) and others. The FCC is scheduled to meet on Wednesday, June 4 to discuss its recent decision to lower its bank qualifying standards, to which Weiss adds this input: "America's 129 million households and 37 million businesses with bank accounts deserve a higher level of scrutiny, clarity and disclosure regarding the safety of their financial institutions, free of conflicts or cover-ups." About Weiss Ratings: The Weiss bank ratings have warned the public well in advance of 97.1% of bank failures that have occurred from January of 2008 through May of 2025, while also accurately identifying the banks with the lowest risk of failure. Since its founding in 1971, Weiss Ratings has never accepted any form of payment from rated entities for its ratings. Nor has it requested any payment from the FCC. All Weiss ratings are available at In other sectors, the U.S. Government Accountability Office (GAO) reported that the Weiss ratings of U.S. life and health insurers outperformed those of A.M. Best by 3-to-1 in warning of future financial difficulties, while also greatly outperforming those of Moody's and Standard & Poor's. The New York Times reported that Weiss "was the first to warn of the dangers and say so unambiguously." Barron's called Weiss Ratings "the leader in identifying vulnerable companies." Media Contact:Nicole BrownPhone: 5612919625Email: nbrown@ View original content to download multimedia: SOURCE Weiss Ratings Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Homeowners devastated after learning brutal reason their insurance claims were denied: 'Like a punch in the gut'
In Florida, the skies aren't the only things getting stormy. Homeowners are facing hurricane season with limited insurance protections. As the state prepares for another hurricane season, which begins June 1, homeowners are facing a growing crisis from the companies meant to help them recover. As the Tallahassee Democrat reported, a report by Weiss Ratings revealed that 14 Florida insurers denied payment on over half of all claims filed in 2024. People's Trust, for example, closed 75.4% of claims — nearly double its 2023 rate — without paying a dime. State Farm Florida, the state's third-largest provider, denied nearly 60% of claims. "After paying far higher premiums and suffering widespread storm damage, this is like a punch in the gut for Florida homeowners," Weiss stated. Florida's insurance crisis is the latest symptom of a much larger problem: the rising cost of climate inaction. Human activities — mainly the burning of dirty energy sources such as coal, oil, and gas — are releasing heat-trapping pollution into the atmosphere. This pollution is warming oceans and fueling stronger, slower-moving, and more destructive storms. That means more flooding, more wind damage, and more claims with increasingly fewer payouts. Insurers are responding not by adapting to climate risks but by pulling back: denying claims, raising rates, and exiting high-risk areas. As a result, vulnerable communities, especially in storm-prone regions such as Florida, are left exposed. The Florida Office of Insurance Regulation and state lawmakers are stepping up enforcement. Heritage Insurance was recently hit with a $1 million fine. And Universal Property & Casualty Insurance was ordered to return over $30 million after submitting fraudulent claims to the state's hurricane fund. Do you think your house could withstand a hurricane? No way Maybe a weak one I'm not sure It definitely could Click your choice to see results and speak your mind. New insurers have entered the market thanks to reforms to make the state more attractive for business. On a broader level, organizations such as Rewiring America are helping households transition away from dirty energy, a crucial step in cutting the pollution driving extreme storms. Federal efforts, such as the Inflation Reduction Act, are funding clean energy, energy efficiency, and disaster resilience programs across the country. However, the incentives provided to modernize your home may be removed under President Donald Trump with an act of Congress. No one can stop a hurricane. But by pushing for accountability from insurers, cutting the pollution that's making storms worse, and exploring climate issues, we can weather what's coming. 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.
Yahoo
13-05-2025
- Business
- Yahoo
Florida Home Insurance Crisis Bleeding Into Louisiana
Insurers closing more than half of claims without payment. PALM BEACH GARDENS, Fla., May 13, 2025 /PRNewswire/ -- Weiss Ratings, the nation's leading independent rating agency, has issued a critical report highlighting how Florida's property insurance crisis is impacting Louisiana homeowners. The report identifies three alarming trends among insurers operating in both states, raising concerns about financial stability and claims denials. "Louisiana homeowners are being shortchanged by insurers prioritizing profits," said Dr. Martin D. Weiss, founder of Weiss Ratings. "Regulators must act, and homeowners should choose insurers with fair practices and strong ratings." According to data gathered by Weiss Ratings, insurers in Louisiana are increasingly doing three things: They're closing claims with no payment whatsoever. They're using underwriting losses to lobby for rate hikes while making investment profits that are far larger. Plus, they're outsourcing to affiliates, which reduces funds available to pay claims. More Claims Closed Without Payment Nationwide, insurance companies closed 41.9% of homeowner claims with no payment in 2024, up dramatically from 25.8% in 2004. But in Louisiana, the denial rate was even higher at 44.6%. The table below shows the large insurers operating in the state with the highest denial rates. Large Insurers Operating in Louisiana Closing More ThanHalf of Homeowner Claims with No Payment (% of total claims closed as reported at year-end) Insurance Company Name StateDomiciled 2024 2023 Kin interinsurance Network FL 68.3 % 44.0 % Spinnaker Insurance Co. IL 60.6 % 49.3 % Elevate Reciprocal Exchange TX 54.9 % 50.5 % SureChoice Underwriters Recpl TX 51.3 % 51.1 % Allied Trust Insurance Co. TX 51.2 % 43.0 % Safepoint Insurance Co. FL 51.2 % 31.6 % Allstate Vehicle & Ppty Ins Co. IL 50.9 % 47.1 % Data Source: Companies' 2023 and 2024 annual statements, schedule P.3A, columns 11 and 12, row 11. Excludes claims subsequently reopened. Seven companies closed over half of homeowner claims with no payment in 2024. Kin Insurance closed 68.3% of claims, Spinnaker Insurance closed 60.6%, Elevate Reciprocal Exchange closed 54.9%, and SureChoice Underwriters closed 51.3% — all with zero payment. In addition, smaller insurers domiciled in the state followed a similar pattern: Cajun Underwriters Reciprocal Exchange closed 53.8% of claims with no payment, while Gulf States Insurance Company closed 47%. Investment Profits Are Far Bigger Than Underwriting Losses Insurers often blame premium hikes on underwriting losses, but their investment gains tell a different story. Nationally, in the 20 years since 2004, insurers lost $23.5 billion on underwriting but earned $155 billion from investments and other sources. In Louisiana, it was even more extreme: Companies operating in the state reported $1.6 billion in underwriting losses, dwarfed by $88.3 billion from investments and other sources. That's $55 in profits for each $1 of underwriting losses. Hidden Fees Reduce Funds Available to Pay Claims Homeowner insurers have paid large fees to affiliated companies, reducing reserves available to pay claims. Nationwide, they have paid $86.7 billion to affiliates since 2004; while those operating in Louisiana have paid $27.1 billion, effectively hiding these funds from regulators. "We urge regulators, policymakers, and consumers to scrutinize these practices, demanding greater transparency," concluded Dr. Weiss. Media Contact:Nicole BrownWeiss RatingsEmail: nbrown@ (561) 291-9625 About Weiss Ratings: Weiss covers 53,000 institutions and investments, including safety ratings on insurers, banks and credit unions as well as investment ratings on stocks, ETFs, mutual funds and cryptocurrencies. Since its founding in 1971, Weiss Ratings has never accepted any form of payment from rated entities for its ratings. All Weiss ratings are available at The U.S. Government Accountability Office (GAO) reported that the Weiss ratings of U.S. life and health insurers outperformed those of A.M. Best by 3-to-1 in warning of future financial difficulties, while also greatly outperforming those of Moody's and Standard & Poor's. The New York Times reported that Weiss "was the first to warn of the dangers and say so unambiguously." Barron's called Weiss Ratings "the leader in identifying vulnerable companies." View original content to download multimedia: SOURCE Weiss Ratings
Yahoo
18-03-2025
- Business
- Yahoo
Florida Home Insurers Shifted $2.1 Billion off Their Books in 2023
PALM BEACH GARDENS, Fla., March 18, 2025 /PRNewswire/ -- While Florida legislators launch an investigation of Florida-domiciled insurers that moved billions of dollars off their books between 2017 and 2019, Weiss Ratings has just completed a landmark study showing the practice has accelerated in recent years. In 2023, the last year for which complete data is available, Florida-domiciled insurers that wrote homeowners policies transferred $1.8 billion to affiliates for expenses plus another $335 million to investors via dividends, or a total of $2.1 billion that was unavailable to pay claims.* "If they're moving billions, it makes you wonder how they can do right for policyholders" said Dr. Martin D. Weiss, founder of Weiss Ratings. "So, it should come as no surprise that the data we're revealing today dovetails with our report that Florida insurers closed nearly half of hurricane and other damage claims with no payment whatsoever to policyholders, also in 2023." There's nothing fundamentally wrong with doing business with affiliates or paying dividends to investors, even if the vast majority are out of state. However, Florida-domiciled insurers have pursued both avenues far beyond the national average. In 2023, Florida-domiciled companies paid 20.4% of their expenses to affiliates, a rate that's the highest since 2014 and four times higher than companies outside of Florida. Florida-domiciled companies have also broken from the national norm with their dividend payments to investors. While almost all companies in other states pay dividends out of profits, many Florida companies have continually paid large dividends despite losses. In 2021, Florida-domiciled companies reported an aggregate loss of $522 million, but paid dividends of $295 million. In 2022, they lost $778 million, while still paying out $213 million in dividends despite the flood of red ink. And in 2023, with a meager profit of $160 million, they paid out $335 million in dividends, or more than double their profits. "This pattern of behavior is unfortunate for homeowners," Weiss concluded. "Strangely, companies often question the source of our information, but it's from their own official statements they file with the states and the National Association of Insurance Commissioners. It's damning data, and I trust it will be thoroughly investigated by the legislature." About Weiss Ratings: Weiss covers 53,000 institutions and investments, including safety ratings on insurers, banks and credit unions as well as investment ratings on stocks, ETFs, mutual funds and cryptocurrencies. Since its founding in 1971, Weiss Ratings has never accepted any form of payment from rated entities for its ratings. All Weiss ratings are available at The U.S. Government Accountability Office (GAO) reported that the Weiss ratings of U.S. life and health insurers outperformed those of A.M. Best by 3-to-1 in warning of future financial difficulties, while also greatly outperforming those of Moody's and Standard & Poor's. The New York Times reported that Weiss "was the first to warn of the dangers and say so unambiguously." Barron's called Weiss Ratings "the leader in identifying vulnerable companies." * Florida's state-run Citizens Insurance, which does not report fees to affiliates or pay dividends, is not included in this study. For media inquiries contact Nicole Brown, 561-291-9625 or nbrown@ View original content to download multimedia: SOURCE Weiss Ratings Sign in to access your portfolio
