Insurance Commissioner questioned by House panel as insurance bill heads to floor

David Altmeier is out. Image via Colin Hackley.

As the House Appropriations Committee moved forward with legislation Tuesday designed to stabilize Florida’s property insurance market, the industry’s top regulator, Insurance Commissioner David Altmaier, is coming under increasing scrutiny for his actions as the crisis that pushed them into a Special Session grew.

Rep. Erin Grall, a Vero Beach Republican, questioned why Altmaier hadn’t produced industry data on claims processed as required by a law passed in 2021 to be collected by January 2022. Altmaier said his agency’s interpretation of the law was that January 2022 was the starting point for collecting the data, not the due date.

“We felt like we were complying with the spirit of that requirement,” Altmaier said.

Grall was the only member of the committee to vote against the bill, HB 1D.

After the meeting, committee chair Jay Trumbull, a Panama City Republican, said Altmaier knows the data needs to be produced sooner than the January 2023 timeframe he believed was required.

“The Insurance Commissioner after the Senate hearing yesterday, and now, our hearing today, understands the ramifications of their decision not to have that data to us by January 1,” Trumbull said. “That data is going to probably get to us quicker now. And then we also have policies, proposals in the bill that is going to allow us to get much more information.”

The claims data is key to the legislation under consideration by lawmakers in the Special Session. Gov. Ron DeSantis called the session as several insurers went into liquidation, canceled policies or hiked rates. Some lawmakers have warned more companies are on the brink of bankruptcy, which would put more assessments on insurance policies throughout the state to pay for the failed companies’ outstanding claims.

Insurance companies have pointed to spiking roof claims and litigation as some of the main reasons for their $1.5 billion in losses over the last two years, which led to skyrocketing rate increases. Trial attorneys have pushed back in legislative hearings Monday and Tuesday, noting that only 8,400 fraud complaints have been filed in the last four years, and less than 100 have led to convictions.

Reggie Garcia, a trial attorney and lobbyist for the Florida Justice Association, a trial attorney trade group, said Altmaier’s citation of National Association of Insurance Commissioner data that shows Florida had 76% of property insurance lawsuits in the country and 7% of claims in 2019 is suspect. New York, North Dakota, and part of the Texas market were excluded from that data, and Hurricane Irma in 2017, which affected much of the state, produced a glut of lawsuits that showed up two years later.

“Candidly, we don’t think those numbers are credible,” Garcia said.

The bill limits attorney fees, sets up a state taxpayer-backed reinsurance fund, and allows companies to charge a deductible for roof claims. However, supporters of the bill have said there’s no way to determine how much the changes will save homeowners because each company must have their rates reviewed by regulators and the changes must play out in the marketplace before their impact can be known.

But without claims data from insurers, the bill’s possible impact is likely to be more obscure.

The bill also includes transparency measures requiring the Office of Insurance Regulation to investigate market trends, review companies’ financial conditions, and issue reports on insolvencies more frequently.

When asked if he has enough employees to take on the new tasks, since the bill doesn’t provide new positions or funding for the department, Altmaier said he’s struggling to keep workers in his department.

“One of the biggest challenges is turnover in that unit,” Altmaier said. “Unfortunately, our agency needs the same kind of talent that the private industry needs. As you might imagine, they have a better ability to pay a little bit more.”

The Senate passed its version of the bill Tuesday. The House is expected to pass the bill off the floor Wednesday and send it to DeSantis’ desk.