Cracking down on shady contractors and attorneys is the Florida Office of Insurance Regulation’s top priority for the 2017 legislative session, but officials made clear Wednesday they intend to protect consumers’ rights in drafting their proposals.
“It’s our No. 1 priority, but we would like to fix it in a surgical way,” Caitlin Murray, the department’s director for government affairs, said during the office’s biannual industry conference in Tallahassee.
She was referring to assignment of benefits contracts, a way for property insurance policyholders to sign away their insurance rights to contractors or attorneys in exchange for quicker repairs.
Critics contend they are easily abused, leading to inflated or shoddy repairs and rising premiums. For example, Citizens Property Insurance Corp. blamed these deals for a 6.4 percent rate hike that takes effect Feb. 1.
Fully 72 percent of rate filing increases were for increases thus far this year, Murray said, suggesting much of the blame falls on these so-called AOBs.
As with its other legislative priorities, the office plans to confer with all interested parties in drafting a legislative solution, she said.
“We want to make sure we hone in on the real problems and simply get it done,” Murray said. “As the saying goes, pigs get fat; hogs get slaughtered.”
She stressed: “I want to make it clear that the office is absolutely intending on proposing legislation to address this issue. Our No. 1 priority has been and continues to be to hold consumers harmless. With that, we are still looking into attorney fees provisions, however with a consumer-centric plan to fix it.”
Another priority is shoring up the health maintenance organization industry, where revenues have increased significantly but profits have declined, apparently due to higher loss ratios.
“Medical expenses are increasing faster than revenues, and HMOs are running very tight margins,” she said. “So any unexpected increases in losses could challenge solvency.”
Long-term care insurance is in a similar pickle. Notwithstanding premium increases, the business is suffering and the numbers of carriers is declining, leading to “a serious loss in consumer confidence.”
Continuous care retirement homes provide for 30,000 Floridians, and need additional oversight, Murray said.
“Changes to the business model have outpaced statutory changes that are necessary to maintain efficient and effective regulation of the industry, leaving a very vulnerable segment of the population without adequate protections,” she said.
“We are looking at ways to strengthen and streamline the licensing and acquisition process. We want to establish stronger consumer protections and any other revisions that may be necessary to clarify statutory requirements and provide the office with adequate regulatory authority.”
The office plans to monitor legislative proposals on workers’ compensation and personal auto insurance, but not propose fixes itself. It does plan to propose a regulatory clean-up bill.
“This is strictly for the purpose of regulatory efficiency, and is not intended to be an omnibus or catch-all insurance bill, or vehicle to throw on unrelated insurance issues,” Murray said. “We hope.”