Consumer advocates call for more scrutiny as insurers report losses and request rate hikes
By Julie Patel, Sun Sentinel
Florida property insurers are pressing state legislators to allow them to raise rates without regulator approval, citing losses in recent years. But consumer advocates and regulators question the legitimacy of the losses after four hurricane-free years in Florida.
One key issue: fees paid by some insurance companies to affiliates – most with the same executives and shareholders. Critics say these payments may be inflated and instead could be used to bolster reserves.
A Sun Sentinel review of 26 Florida-based insurers found that the companies collectively reported a $87.8 million drop in claims-paying reserves last year and a $206.9 million underwriting loss, incurred when premiums don’t offset expenses.