Alyssa Lane
Florida's insurance regulations have undergone significant changes in recent years, with the state implementing various measures to benefit both insurers and insureds. The Office of Insurance Regulation (OIR) is the primary regulator, overseeing licensing, rates, policy forms, market conduct, and more. Florida has a reputation for high insurance litigation, with homeowner claims accounting for 79% of insurance litigation in the US. To reduce litigation, Florida has eliminated one-way attorney fees and prohibited the Assignment of Benefits (AOB). The state has also introduced Citizens Insurance, a public insurance option, to guarantee insurance access, but this has resulted in taxpayer burden. To address this, new policy eligibility requirements have been established, and Citizens rates are being adjusted. Reinsurance programs, such as FORA, have been created to support insurers in the event of hurricanes, while also incentivizing them to stay in the Florida market. Florida continues to make changes to increase insurance supply and stabilize rates, with ongoing efforts to improve the insurance landscape for all stakeholders.
| Characteristics | Values |
|---|---|
| Goal | Increase the supply of available insurance, stabilize insurance rates, reduce the burden of taxpayer-backed plans, and bolster insureds' confidence |
| Prohibitions | One-way attorney fees, Assignment of Benefits (AOB), false advertising, unfair discrimination, unfair claim practices, coercion, providing free insurance, unlawful rebates, refusing to insure, misrepresentation, premium surcharges, illegal dealings in premiums |
| Changes | Elimination of one-way attorney fees, New role for policyholders, Reduced time for filing a claim, New policy eligibility requirements, New reinsurance program, Changes to cancellation policy |
| Requirements | Insurers must disclose the number of claims opened and closed each month, the number of pending claims, and the number of claims using alternative dispute resolution |
| Oversight | Increased accountability and oversight of insurance companies by the Office of Insurance Regulation (OIR), including market conduct examinations, investigation referrals, and financial oversight |
| Regulation | Regulation of insurance rates, policy forms, market conduct, claims, licensing, solvency, enforcement of statutes, and monitoring of industry markets |
| Licensing | Pre-licensing course required for most major license classes, in-house adjusters must be properly licensed |
| Compliance | Compliance with the Florida Insurance Code, statutes, and regulations, including fiduciary duties for licensed insurance agents |
| Entities | Property and casualty insurers, life and health insurers, insurance agents and adjusters, residual markets, Citizens Property Insurance Corporation |
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What You'll Learn
The Florida Office of Insurance Regulation (OIR)
The OIR is committed to protecting Florida seniors and referring examination findings for criminal investigation. It also investigates allegations of unauthorized and illegal insurance activity and conducts in-depth investigations of authorized insurers. The OIR works with the Legal Services office to take administrative action, impose administrative penalties, and require corrective action to protect insurance consumers from unlawful or harmful business practices.
The Company Admissions units within the OIR assist insurance companies and others seeking general information about the business climate in Florida. These units work closely with companies to submit and review applications for a Certificate of Authority (COA) to transact insurance in the state.
Senate Bill 7052 includes provisions to increase the accountability and oversight of insurance companies in Florida by the OIR. This bill gives the OIR additional authority to conduct market conduct examinations on insurance companies 90 days after a hurricane, if the company receives a certain level of consumer complaints and/or claims. It also outlines when the OIR must prioritize examinations based on complaints and suspected violations of the law.
The OIR strives to make its records, data, and reports publicly available for free. Requests for records that are not available on the website can be made by mail, telephone, hand delivery, or email.
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The role of the FSC and the Insurance Commissioner
Florida's insurance regulations are undergoing significant changes to benefit both insurers and insureds. The state is known for its high volume of insurance litigation, with homeowner claims accounting for 79% of all insurance litigation in the US. To address this, Florida has eliminated one-way attorney fees, reducing costs for insurance companies.
The Florida Office of Insurance Regulation (OIR) plays a crucial role in overseeing insurance-related matters. The OIR is responsible for regulating, enforcing, and monitoring the compliance of insurance companies with relevant statutes and industry markets. The head of the OIR is the Florida Insurance Commissioner, who is appointed by the Financial Services Commission (FSC).
The FSC, composed of the Governor, Chief Financial Officer, Attorney General, and Commissioner of Agriculture, serves as the agency head for rulemaking purposes. The FSC makes decisions through a majority vote. The Insurance Commissioner, as the agency head, takes the final agency action within the regulatory authority delegated to the OIR.
The OIR has various units that perform specific functions, including the Life and Health unit, the Property and Casualty unit, and the Market Research and Technology unit. These units oversee different aspects of the insurance industry, such as licensing, rates, policy forms, market conduct, claims, and financial stability.
The OIR also works to protect consumers by providing oversight to residual markets, ensuring that consumers who cannot obtain coverage in the private market can still access insurance. This includes entities like Citizens Property Insurance Corporation, which is governed by a Board of Governors and provides insurance protection to Florida property owners who may struggle to find coverage elsewhere.
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![An outline of the law of insurance, with illustrative cases / by Charles B. Elliott. Volume v.1-2 1896 [Leather Bound]](https://m.media-amazon.com/images/I/81nNKsF6dYL._AC_UY218_.jpg)
The Property and Casualty Financial Oversight unit
Florida's insurance regulations have undergone significant changes to create a more mutually beneficial environment for both insurers and insureds. The state has a reputation for being highly litigious when it comes to insurance, with homeowner claims accounting for 79% of all insurance litigation in the US. To address this issue, Florida has eliminated one-way attorney fees, reducing costs for insurance companies.
Additionally, the unit assists insurance companies seeking general information about Florida's business climate. It guides companies through the process of obtaining a Certificate of Authority (COA) to operate within the state. This collaborative approach ensures that insurance providers have the necessary insights and approvals to navigate the state's insurance landscape effectively.
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The Life and Health Financial Oversight unit
One of the key roles of the Life and Health Financial Oversight unit is to review and analyze financial statements and reports submitted by insurance companies. This includes examining balance sheets, income statements, and other financial documents to assess the financial health and stability of these companies. The unit also reviews insurance rates and rate changes proposed by companies to ensure they are actuarially sound and comply with applicable laws and regulations.
Additionally, the unit is tasked with conducting financial examinations of insurance companies. These examinations involve on-site inspections and audits to verify the accuracy of financial reports and to assess the company's financial condition. The examinations may include a review of assets, liabilities, reserves, investments, and other financial aspects of the company's operations.
Furthermore, the unit is responsible for handling consumer complaints and inquiries related to financial matters. Consumers can reach out to the unit if they have concerns about an insurance company's financial stability, billing issues, or other financial disputes. The unit investigates these complaints and works to resolve them, ensuring fair and equitable treatment of policyholders.
In summary, the Life and Health Financial Oversight unit is a vital component of Florida's insurance regulation framework, dedicated to safeguarding the financial interests of consumers and ensuring the stability and integrity of the life and health insurance market in the state. Through its financial analysis, examinations, solvency monitoring, and consumer protection efforts, the unit plays a crucial role in maintaining a robust and reliable insurance sector in Florida.
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The Life and Health Market Regulation Unit
Consumer Protection: The Life and Health Market Regulation Unit is dedicated to safeguarding the interests of Florida consumers purchasing life and health insurance products. This involves handling consumer complaints, conducting market conduct examinations, and investigating insurance companies and agents to ensure compliance with Florida insurance laws and regulations. The unit takes necessary enforcement actions to resolve issues and secure reparations for consumers who have been wronged.
Financial Solvency Oversight: In collaboration with the Office of Insurance Regulation, this unit closely monitors the financial condition and solvency of life and health insurance companies operating in Florida. This includes reviewing financial statements, conducting financial examinations, and analyzing the ability of insurers to meet their obligations to policyholders. By ensuring the financial stability of insurance companies, the unit protects consumers from the risks associated with insolvent insurers.
Product and Rate Review: The Life and Health Market Regulation Unit reviews and approves insurance products and rates for life, health, annuity, and managed care plans. This process ensures that insurance policies offered in Florida are understandable, comply with state laws, and provide adequate coverage for consumers. The unit also reviews and approves marketing materials to ensure they are accurate and not misleading to potential policyholders.
Health Maintenance Organization (HMO) Regulation: In Florida, HMOs are regulated by the Life and Health Market Regulation Unit. This involves licensing and overseeing HMO organizations and ensuring compliance with state laws and regulations. The unit conducts examinations, investigates complaints, and takes enforcement actions to protect enrollees and ensure quality healthcare delivery.
Market Conduct and Compliance: The unit conducts regular market conduct examinations to assess the compliance of insurance companies and agents with Florida insurance laws and regulations. These examinations cover various areas, including sales practices, claims handling, underwriting, rating, and advertising. By proactively monitoring market conduct, the unit can identify and address any unfair or deceptive practices, ensuring a fair and competitive insurance market.
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Frequently asked questions
The OIR is responsible for all activities concerning insurers and other risk-bearing entities, including licensing, rates, policy forms, market conduct, claims, issuance of certificates of authority, solvency, viatical settlements, premium financing, and administrative supervision. The head of the OIR is the Florida Insurance Commissioner, who is appointed by the Financial Services Commission (FSC).
Florida insurance regulators have been making significant changes to create a more balanced environment for both insurers and insureds. Some of these changes include eliminating one-way attorney fees, prohibiting Assignment of Benefits (AOB), and implementing the My Safe Florida Condominium Pilot Program to provide inspections and grants for condominium associations to mitigate hurricane damage.
Florida law requires all licensed insurance agents to act in a fiduciary capacity, putting their clients' interests first. They must also conduct their business practices in accordance with the laws and regulations of Florida, avoiding prohibited practices such as false advertising, unfair discrimination, coercion, and unlawful rebates.
