Florida regulators levy $2.07 million in fines against eight insurers

Florida’s Office of Insurance Regulation has fined eight property casualty companies, including three local ones, more than $2 million for the firms' handling of claims, and more fines could be on the way.

The fines come after examinations of the companies’ claims handling processes by the state’s Market Conduct Unit, which found there were issues with how they dealt with clients in the aftermath of hurricanes Ian in 2022 and Idalia in 2023.

There are two examinations still pending.

OIR looked at 10 companies during its examination, eight of which, according to a statement, had “several findings of misconduct for business practices” during the two storms.

Of the eight, three are local. St. Petersburg-based American Coastal Insurance Co., which was fined $400,000; St. Petersburg-based American Mobile Insurance Exchange, which was fined $400,000; and Lakewood Ranch-based Centauri Specialty Insurance Co., which was fined $100,000. (Ocala-based TypTap Insurance Co., which was fined $150,000, is a subsidiary of Tampa-based HCI Group.)

American Coastal and American Mobile  did not respond to a request for comment Tuesday.

Ricardo Espino, president of Lilypad Insurance, says in an email that “the regulatory action announced by the Florida Office of Insurance Regulation pertains to claim practices that occurred prior to Lilypad’s acquisition of Centauri Insurance.”

(Lilypad bought Centauri last year.)

“Since the acquisition, Lilypad has implemented significant operational and compliance enhancements across the organization,” Espino writes. “We remain fully committed to fair and timely claims handling, and to maintaining the highest standards of service for our policyholders.”

The findings against the eight insurance companies, OIR says in a statement, include using adjusters that were not properly appointed; not acknowledging receipt of claims communications in a timely manner; not including certain disclosure statements when providing estimates on damage claims; failing to provide Homeowners Claims Bill of Rights; and failing to pay interest when owed.

In one case, the unit identified error rates of over 60% for Hurricane Ian and over 80% for Hurricane Idalia for a company that did not include disclosure statements. In several other cases, it found companies failed to pay or deny claims within 90 days.

The agency says its enforcement is a result of insurance reforms passed in the past few years aimed at stabilizing the state’s property insurance marketplace. The reforms included a “greater ability to enforce regulatory authority and take action to increase market regulation compliance.”

OIR says that the Market Conduct Unit secured $8 million in restitution and issued more than $2.8 million in fines in Fiscal 2023-2024. In the first quarter of this year, it secured $660,450 in restitution.

The state’s insurance commissioner, Mike Yaworsky, says he is “fully prepared to deploy OIR examiners to make sure claims management practices are efficient and handled appropriately.”

“We will be paying particularly close attention to any company who has had concerning performance behavior in the past.”

In the statement, OIR says that unlike cases involving litigation, the fines it assesses do not negatively affect policyholder insurance rates.

This story has been updated with a comment from the president of Lilypad Insurance, which bought Centauri Specialty Insurance Co. last year.