'The tip of the iceberg' 8 insurance companies fined more than $2 million for 'misconducts' in claims

TALLAHASSEE, FL — On Tuesday, Florida Insurance Commissioner Mike Yaworsky announced eight insurance companies were fined more than $2 million for 'several misconducts' in their response to claims made after Hurricanes Ian and Idalia.

THE FINES AND PENALTIES

"Capital is pouring in, and the market is stabilizing, but our office holds insurers to high standards. It is important that consumers have confidence that they are getting what they pay for," said Commissioner Mike Yaworsky in a release Tuesday. "The Office of Insurance Regulation stands ready to fulfill oversight duties assigned by the Legislature and make sure Floridians are being treated fairly, especially after hurricanes. Insurer accountability and consumer protection will always take priority—we want companies to thrive, but companies must also be worthy of doing business in our state."

Watch report from Nadeen Yanes

The market conduct examinations included the following companies and penalties:

• American Coastal Insurance Company- $400,000;
• American Mobile Insurance Exchange- $400,000;
• Centauri Specialty Insurance Company- $100,000;
• Clear Blue Insurance Company- $400,000;
• Monarch National Insurance Company- $325,000;
• Sutton National Insurance Company- $50,000;
• Tower Hill Prime Insurance Company- $250,000; and
• TypTap Insurance Company- $150,000. 

According to the release on Tuesday, findings included these companies used unauthorized property adjusters for claims, did not acknowledge they received a claim in a timely manner, left out required disclosure statements when giving damage repair estimates, and did not provide homeowners with the required 'Homeowners Claims Bill of Rights" among other things.

The insurance commissioner also stated that one company omitted disclosure statements in more than 60% of Hurricane Ian claims and 80% of Hurricane Idalia claims.

'TIP OF THE ICEBERG'

Adding several of the companies listed also did not meet the 90-day deadline to pay or deny claims.

"This is just the tip of the iceberg," said Blaise Ingoglia, Florida's new Chief Financial Officer. "We fined 8 insurers a total of $2 million dollars today that is for not doing what they said they were going to do post Hurricane Ian and Idalia. It is important for policyholders and taxpayers to know that the person that sits in this chair, the CFO of Florida has their back when it comes to policyholders."

Ingoglia said these fines imposed will not impact rates.

The insurance commissioner also stated that they are conducting market evaluations of two additional companies, and further information will be provided.

“With the most active part of hurricane season approaching, I am fully prepared to deploy OIR examiners to make sure claims management practices are efficient and handled appropriately," Yaworsky said. "We will be paying particularly close attention to any company who has had concerning performance behavior in the past.”

The Office of Insurance Regulation also posted each company's examination report on its website.

'SLAP ON THE WRIST'

"Those fines come directly out of the companies profits, they aren't spread out among the risks and the rates, so nobody is paying for them but the owners and the directors of the companies," he added.

However, Doug Quinn of the American Policyholders Association said the penalties don't go far enough.

"The good news is they are taking some action to hold these insurers accountable, the not so good news is most people will say these fines are a slap on the wrist," Quinn said. "These companies have been caught squirreling away billions of dollars sent through their affiliates, the abuses in terms of cheating people on claims, the abuses listed in these consent orders is absolutely horrible."

THE COMPANIES RESPONSE

Tampa Bay 28 reached out to the listed insurance companies, and two responded as of Tuesday afternoon.

Monarch National Insurance Company said:

“From July 1^st, 2022 through December 31^st, 2022, Monarch used FedNat Underwriters as its MGA for 6 months after Hale Partnership’s controlling acquisition of Monarch, pursuant to the contractual requirements of the controlling ownership acquisition of Monarch. As soon as FedNat Underwriter’s poor performance during Ian emerged in the first month after the storm, on November 1^st, 2022, Hale Partnership directed Monarch to terminate its MGA relationship with FedNat Underwriter’s effective 12/31/2022. Hale Partnership has hired over 130 employees to staff its own MGA, HP Managing Agency, which has served Monarch since January 1^st, 2023. As shown in the consent order, the fine relates to FedNat Underwriters poor service of Monarch policyholders after hurricane Ian. Hale Partnership saw the same problems as the market conduct exam in real time almost 2 years ago and acted immediately on behalf of policyholders. Hale Partnership is pleased that its view of the required excellence to serve policyholders is shared by Commissioner Yaworsky and CFO Blaise Ingoglia, as Floridians deserve only the highest of standards in customer service.”

Centauri Specialty Insurance, now Lilypad Insurance Company also responded:

"The regulatory action announced by the Florida Office of Insurance Regulation pertains to claims practices that occurred prior to Lilypad’s acquisition of Centauri Insurance. Since the acquisition, Lilypad has implemented significant operational and compliance enhancements across the organization. We remain fully committed to fair and timely claims handling, and to maintaining the highest standards of service for our policyholders."