First Florida House Hearing on Insurers’ Profits, Expenditures Results in Limited Answers

TALLAHASSEE—The first Florida House hearing investigating insurers over a newly-discovered 2022 report claiming they hid profits while shelling billions to affiliates resulted in a common response from key insurance officials on the report's circumstances:

"I don't know."

Florida Insurance Commissioner Michael Yaworsky and his predecessor, David Altmaier, appeared before the House Insurance and Banking Subcommittee Friday morning to discuss the findings of a report unveiled by the Tampa Bay Times in February. While both officials stressed that the report, which was discovered still in draft form, was incomplete and did not indicate fraud, they could not explain why the study had not been finalized.

"This process stopped internally at some point, so you did not have that typical dialogue of exchange between the office and the vendor," said Yaworsky, who's headed the Office of Insurance Regulation since March 2023, on the group that conducted the 2022 report.

"We have looked hard and fast. I do not know [what stopped the process]," he continued. "I think it's possible that they were simply overwhelmed. I don't know particularly why there's no email or document or discussion...I think it just got wound up in a very overwhelming time."

Yaworsky has previously called for increased oversight of affiliate companies and this year, has asked state lawmakers to change how insurers compensate affiliates.

The hearing, which lasted three hours—an hour longer than scheduled—centered on the seven-page draft report from March 2022. It was called by House Speaker Danny Perez on the first day of the legislative session to examine the study which, while incomplete, claimed that while insurance rates increased across the state, and insurance companies sought legislative relief after reporting millions in losses from hurricanes Irma and Michael, their parent companies and affiliates were making billions.

It did not come to light until last week. State lawmakers never saw the report, Yaworsky and Altmaier say, because it was never completed and only in the draft stages.

"[The report] certainly raised some red flags [at the time]," said Altmaier, noting that he believed the report was still ongoing while he was Commissioner, and "in hindsight," he could have "poked a bit" more to keep an eye on the study. He led the Office of Insurance Regulation from 2016 through the end of 2022.

According to the report, affiliates made $14 billion when insurance companies said they were losing millions. Yaworsky acknowledged this but noted that the figure is not only from Florida companies but from national ones and does not differentiate between income sources.

"It's a very incomplete picture," he said.

Both officials agreed that reform is necessary and assured lawmakers that the Office of Insurance Regulation is prepared to cooperate with any further investigations.