State Representative Alan Hays Joins Florida Consumer Action Network, National Advocacy Think Tanks In Support of Insurer Administrative Supervision Transparency
Jul 20, 2010
Just prior to the opening of the Florida Legislature’s Special Session 2010-C today, July 20, 2010, State Representative Alan Hays (R-Umatilla) joined representatives from The Heartland Institute, Florida Consumer Action Network and The James Madison Institute at a press conference to announce their support of transparency in regard to the Florida Office of Insurance Regulation’s (“OIR”) handling of insurance company administrative supervision, especially as it relates to consumers.
Speaking at the press conference this morning, Representative Hays, who has long been critical of the OIR, cited e-mails obtained by the Heartland Institute suggesting that OIR staff appears to have simultaneously decided to forbid an insurer from issuing new policies in hurricane prone-counties, yet not released this information to the public. He asked the OIR to publically release this information in the future and called for regulatory transparency in regard to insurance company failures.
Representative Hays further stated that the people of Florida need to know when insurers are “on shaky ground.” He expressed his support of a related provision in SB 2044, the Senate’s approved 2010 property insurance bill that was vetoed by Governor Charlie Crist. The bill would have charged the OIR with developing a comprehensive program to provide consumers with all available, pertinent information necessary to facilitate the purchase of a homeowner’s insurance product. The portion of SB 2044 containing the provision is attached for review.
The Heartland Institute’s Eli Lehrer commented on the previously existing lack of financial strength of a particular troubled insurer and the failure of the OIR in fulfilling its duty to notify the public.
In a letter to Florida Insurance Commissioner McCarty circulated prior to the press conference, Heartland Institute Executive Director Christian Camara states that: “Although your staff’s action likely prolonged the life of the insurer (which, of course, became insolvent anyway) it led to consumers being uninformed about a company that was not prepared to pay claims. This, for all intents and purposes, put the interest of the company stock and debt holders ahead of those of the state’s residents. We ask you to put consumers first and develop policies for prompt, open and public revelations of any and all OIR actions that, for any reason, bar any entity regulated by the office from writing any type of insurance policy.”
On May 27, 2009, the above-referenced insurer was placed in administrative supervision. On April 7, 2010, the OIR notified the Florida Department of Financial Services that the company was insolvent and in hazardous financial condition.
While acknowledging that the OIR had not violated any laws regarding this matter, Mr. Lehrer suggested that public notice should be given when a company is in administrative supervision and unable to write new business in Florida. A copy of the aforementioned letter on this subject from The Heartland Institute to Commissioner McCarty is attached for review.
The Florida Consumer Action Network also issued a statement in support of greater transparency at the OIR. A copy of that statement is also attached.
Representative Hays concluded the press conference, noting that he expects substantial insurance legislation to be filed during the 2011 Regular Session, but that he did not expect any insurance-related proposal to be filed for the Special Session today, nor for the expected Special Session in late August or early September.
Should you have any comments or questions, please contact Colodny Fass.